Economists and the vortex of power

Today, in the car:

— So, what, everyone is an idiot? All the politicians, all the economists in the Washington think this is the right thing to do, and they’re all idiots? How can all of them be idiots?
— What about the Soviet Union? Were all the politicians, economists, etc. idiots?
— In the Soviet Union — yes. Here it’s different.
— It’s not different for those that want to turn the US into a Socialist state.
…
— You didn’t like everything going on in the Soviet Union, did you? The corruption, the black market, the country turned into a prison, nobody caring about anything…
— Yeah, but that was politics.
— The politics is the result of the economic system. Whenever socialist goals are set, the society starts to change — go down the drain. In order to “regulate” that, the government has to implement all the “wonderful” political tools of Socialist era. Politics is always closely tied to the economy and vice versa.

Right now, I was listening to Joe Salerno. He said the exact same thing: that even the economists like Bernanke, who seemed to understand what was going on, right now are being sucked into the idiocy. The explanation is simple: once you get involved with the government, you start thinking in terms of political self-preservation and get sucked-in into the centralized vortex of regulationism. The closer you get to the vortex, the more you’re influenced by it, the sooner you loose the independence of thinking.

Very interesting conversation. He also discussed Keynesianism (“It’s dead from the neck up”) — a great enabler of the state power, the credit crisis, and the hysterics. Bottom line: allow the economy to restore itself. In the time of recession, the credit cannot be loosely available — and it became loose to begin with because of the Fed.

First, do no harm.