Knowledge & the Second Bank of the United States

Posted on December 12, 2008 by David Hume

Reading about the controversy surrounding the Second Bank of the United States, I get the sense that we know more about how economics operates today than we did 180 years ago. But how much more? Enough to matter? I assume so. But with how much certitude?

This entry was posted in culture, economics, history and tagged , , , . Bookmark the permalink.

15 Responses to Knowledge & the Second Bank of the United States

  1. SSFC says:
    December 12, 2008 at 3:02 am

    “I didn’t teach Jerry Stackhouse a lesson. Basketball taught him a lesson.” — Michael Jordan, after lighting up the former college star for 48 points. Stackhouse had remarked that basketball was “easy” after his NBA debut.

    We may know more about economics today, but in the 1820s we were playing high school economics. Today we’re in the NBA finals.

  2. matoko_chan says:
    December 12, 2008 at 8:19 am

    The basic flaw in your argument for conservatism, Hume, is that the econopalypse of greed that has trashed our economy is perfectly attributable to the free market deregulation promoted by the fiscalcons….removal of bars to home-ownership coupled with Bush/Greenspan artificial depression of interest rates resulted in a whole new domain of sketchy mortgage backed instruments and “sharp dealers”.
    Given that survival and reproduction encourage maximal accumulation and promotion of kinship reps (be they genetic or memetic) how can you possibly argue that understanding “human nature” doesn’t entail regulation to mitigate human tribalistic traits?

  3. Caledonian says:
    December 12, 2008 at 9:22 am

    matoko_chan: Who regulates the regulators?

  4. David Hume says:
    December 12, 2008 at 9:52 am

    The basic flaw in your argument for conservatism, Hume, is that the econopalypse of greed that has trashed our economy is perfectly attributable to the free market deregulation promoted by the fiscalcons

    Where the fuck did I even argue this???

  5. matoko_chan says:
    December 12, 2008 at 11:48 am

    oh I see.
    You are a secular social conservative only, based on your understanding of human nature.
    pardon, my bad.

  6. A-Bax says:
    December 12, 2008 at 1:30 pm

    matoko_chan : the econopalypse of greed that has trashed our economy is perfectly attributable to the free market deregulation promoted by the fiscalconsaits

    I’m no expert, but your position here is seriously contested, with many folks actively blaming the Democrats push for home-ownership in the 90s and their near-religious diversity-worship for much of the current mess:

    http://www.takimag.com/site/article/the_diversity_recession_or_how_affirmative_action_helped_cause_the_housing/

    http://www.renewamerica.us/columns/zieve/080920

    All I’m saying is ease off the gas pedal a little, the diagnosis of what ails us might not be as crystal-clear as you seem to think.

  7. Bob_R says:
    December 12, 2008 at 4:52 pm

    Modern economic science is at the level of – say – Roman physical science. Nice aqueducts. Better that Egyptian physics. Don’t ask any hard questions and don’t expect predictability. A comforting view of the world that only works in a few very specific situations for very short periods of time.

    Bonus question: Has biology found its Ptolemy and moved on to its Copernicus?

  8. Daniel Dare says:
    December 12, 2008 at 10:52 pm

    Matoko, if I could add my 5c-worth to what A-Bax is saying:

    One problem is that re-regulation is far harder than you think in today’s open global economy.

    Will you put restrictions on credit in the USA? Fine, banks will go overseas and borrow in Japan at zero interest rates, adding to the “Yen Carry Trade”. This is a big factor in the credit supply in my country.

    Will you restrict access to foreign credit across the board? Fine, but the markets will always try to arbitrage, from places where capital is abundant and cheap, to places where it is scarce and expensive. So they will simply intermediate the credit into other forms of capital, using corporate structures and accounting genius, and bring the cheap foreign capital in “under the radar”.

    Will you ban all foreign investment? Will you licence it? Regulate it? Fine but expect foreign governments to retaliate. If you prevent foreigners from investing in America, they won’t allow America to invest there. And America is heavily dependent on income from its multinational corporations, with huge investments all around the world.

    IMHO, if you try to reregulate, you will only be partially successful.
    In the long run, the markets will find their way around it.
    If you did succeed with some sort of draconian system of regulation, the cost in lost efficiency, would be far greater than the benefits.
    And in the end, USA will be the biggest loser.

    Hey, I’m an econo-conservative. What did you expect?

  9. Blode0322 says:
    December 13, 2008 at 12:53 am

    We need a more heavily regulated environment. We need fewer regulations.

    To clarify, we need the strictest regulation of all – a 100% reserve requirement. Move to it incrementally. The Fed currently has this power and they still allow fractional reserve banking. I’m not saying the transition would be simple, but it could be done.

    Other than that, though, I think most conservatives should stand against regulations, not because all of them are bad, but because the regulators will look the other way when a favored community stands to benefit.

  10. matoko_chan says:
    December 13, 2008 at 11:59 am

    meh
    My point is this– more secular conservative cognative dissonance, or schizophrenia if you prefer. If the social constructs of the traditional religious forms are required to mitigate homosapiens sapiens SOCIAL behavior, then fiscal regulatory systems are required to mitigate accumulation (greed) and kinship promotion in the marketplace.
    If human “nature” must be controlled and shaped in the social sphere, then why not in the econo-sphere?
    Hume? Anyone?

  11. Daniel Dare says:
    December 13, 2008 at 2:15 pm

    I don’t want to limit accumulation Matoko. I want to be the richest man in the Orion system. You really need to read my manifesto.

  12. Daniel Dare says:
    December 13, 2008 at 2:53 pm

    OK a more serious answer. I don’t want to mitigate accumulation. I accept the desire to reduce risk. And mostly that takes the form of criminal sanctions against fraud and theft.

    Societies have to decide what level of taxation-funded social services they desire, they need to understand the tradeoffs, which are major. They need to understand the limits of political action. The market is millions of times more intelligent than the smartest government.

    Kinship promotion? You have freedom of association. The market self-organises into efficient economic structures.

  13. matoko_chan says:
    December 15, 2008 at 6:16 am

    Well..at this point Hume has epically failed to make the case for secular conservatism, to me at least. His validation of antique forms of socio-religious mores thinly veneered as the pragmatics of a rational understanding of human nature falls apart when confronted with the evolutionary reality of the marketplace. Either homosapiens sapiens needs mitigating controls for tribalistic behavior in both the social domain and the fiscal domain, or in neither.
    Secular conservatism is, like post modern conservatism, weak apologia for a deeply flawed paradigm.
    Conservatism has failed in its current instantiation.
    What good is it to make dishonest excuse to stay in a failed tribe?

  14. Daniel Dare says:
    December 15, 2008 at 9:29 am

    Matoko, You asked in an earlier question,
    “If human “nature” must be controlled and shaped in the social sphere, then why not in the econo-sphere?”

    The econosphere as you call it is not passive. The market has many aspects of a collective intelligence. Everything has unforseen consequences. We only have very limited understanding of market forces. Meddling is deeply dangerous.

    Economic collapses are a real possibility. It has happened to MANY countries. It happened to the USA in 1930s. It happened to countries like Indonesia in the late 1990s. It happened to Weimar Republic Germany in the 1920s and contributed to the Rise of Adolf Hitler. It has even happened to highly-regulated economies like USSR.

    This crisis is possibly still in its early stages. It has vast global implications. Every country in the world is now in varying degrees of crisis. Political institutions are trying to cope with events they don’t understand, using data that unfolds, shock after shock, in real time.

    If you have ten economists, they have eleven opinions. And that is only on the one hand. LOL. I say: Civilizations are like yoyos. It is their nature to rise and fall.

    Crisis is entering new phase. This time I will probably not liveblog. Read MarketWatch.com or Bloomberg.com. Look after yourself.
    DD

  15. Blode0322 says:
    December 15, 2008 at 7:16 pm

    To elaborate on my previous comment, what the marketplace needs is more simple, hard-and-fast regulations of the kind that don’t require judgement calls to enforce. The sorts of regulations which require regulators to peer over hundreds of pages of reports and make a jury-style decision about risk and suspicion and doubt are going to have the least positive impact.

Comments are closed.