“The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending.” ~ Lawrence Summers, “Why the housing burden stalls America’s economic recovery” in The Financial Times.
Source link: http://archive.mises.org/18901/larry-summers-magic-cure/
Larry Summers and His Magic Cure
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{ 17 comments }
This really falls into the “Say What?!?” category. If the guy really believes this nonsense, then he needs to turn in his Ph.D. and get out of this business altogether. This is like saying that if someone is bleeding to death, the “cure” is to bleed the patient even more.
The former President of Harvard ladies & gentlemen…let’s hear it for him.
Don Boudreaux had a wonderful riposte at CafeHayek:
“It’s just as if a drunk, waking up severely hung-over, proclaims to his wife: ‘The central irony of my medical crisis is that while it is caused by too much confidence in my ability to hold my drink, and by too much drinking, it can only be resolved with more confidence in my ability to hold my drink, and by more drinking. Bottoms up!’”
The addictive behavior analogy is correct.
The cure – “the hair of the dog that bit you.”
As W.C. Fields said:
A man has to believe in something. I believe I will have another drink.
Good one, Larry Summers. Central banking works until it doesn’t, and then it *should* work, so why won’t it?
It’s like waiting for a false messiah who never shows up and then saying, “The irony of this situation is that my immortal soul will be saved as soon as the messiah shows up.”
Wait, scratch that. That’s not what it’s LIKE, that’s EXACTLY WHAT IT IS.
It’s the Waiting for Godot of economics
That one is classic! We will be waiting for a long, long time. Between Summers and Krugman, we can see that Ivy League economics is pretty ridiculous stuff.
Most of mainstream economics boils down to the old joke:
If an economist is shipwrecked on a desert island, how does he open a can of beans?
“Insanity: doing the same thing over and over again and expecting different results.” Albert Einstein
Ok, all this PhD stuff is pure bullshit, the guys spend years and years of their lifes trying to give scientific importance to childish propositions they had before going to the doctorate.
Every kid in school learns that “spending moves the economy” and “do-nothing government causes depressions” and they become grown up PhDs, but all the study has no educative value at all, it’s only a label which gives importance and confidence for them to continue saying the same stupid thoughts they’ve always had.
Well, you have to give them some credit – if nothing else, they’ve managed to impress the world, and that’s not easy.
No, I don’t have to give them credit. I am not impressed by those who impress the world.
The world is generally impressed by nitwits. The more stupid, the more the world applauds.
That is how we get Hitlers and Stalins and Mussolinis and Pol Pots and Congressmen.
Nicely said.
Nor should you be impressed. Your observation is at the core of the problem.
I too used to be mad at politicians, academics, and other high-profile figures who take advantage of such a disgusting system as we have today; but eventually the realization came that this kind of person isn’t any worse than your average Joe working at the civil service – only more successful. Neither gives a damn about the moral and economic propriety of what they do, and nor do the vast majority of people. Does that need to change? Most certainly, but until then, it’s healthy to remember that they’re just a product of their environment, and not particularly evil.
This is what Summers should have been fired for–completely illogical thinking.
I find it impossible to accept that Mr. Summers believes this crap. However, his other possible motives to spew this stupidity elude me.
He’s just copying Homer Simpson: http://www.youtube.com/watch?v=hUVwR0rw5fk
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