Message of the Markets Resurrected

I had the idea for a blog -- Message of the Markets over 3 years ago, long before the burst of the housing bubble, the credit crisis, or global depression captured the headlines, or the public imagination.

Back then, I could see the U.S. and the rest of the world were headed on a dangerous path. World leaders had sewn the seeds of economic decline decades ago, and those “green shoots” are now bearing their poisonous fruit. But seeing where the world is likely to go, and writing about it consistently are two different things. In general, people (especially my fellow Americans), do not like to hear about decline and hardship, nor being told to prepare for the difficulties that lie ahead. They prefer the sweet lies of the politicians, to the honest truth.

So, I stopped writing about it—until now.

While there has been much commentary on the economic situation, most of it has been flat out wrong, even by those who should know better. Leaders around the world continue to reward the failures who caused this mess. Authorities, who failed in their duty to protect the public in the first place, now say they need even more power and new laws, to prevent future disasters.

We keep hearing, even from pundits who claim to be friendly to free markets, that the government has to “crack down” on financiers, on executives, and on entrepreneurs of all sorts -- in order to “prevent this disaster from happening again.” They claim that “extremists” who favor “ radical deregulation” are the cause, and that “better, stronger, honest” regulators are the solution.

The question I pose to them is simple-- who shall watch the watchmen? How should individuals, who are supposedly too ignorant to look out for their own interests, decide when lawmakers or regulators are doing a good job, or when they are doing a bad one? And if they can accurately decide what policies are good and bad, why do we need the regulators in the first place?

I have little hope of persuading those who cling to their faith in government and regulation that they are fundamentally mistaken. I have more faith that understanding the flaws in conventional thinking will lead the way to profits in a treacherous market environment—if the government permits us to keep them.