Liberty Pile - Libertarian News

It's not deflation as such which we ought to fear. Rather, it's the effects of Government interference designed to prevent deflation that cause our pain.

In other words, the pain comes from changes and actions to prevent changes. What's needed is stability, and the sooner the better. You cannot achieve stability by standing in front of a tidal wave and commanding it to cease. Nor can you achieve stability by trying one government program after another, each a larger failure than the last.

If you want to succeed you need to go in the right direction, with the trend, with the flow.

I do not know what I would do in Obama's place. What is clear already is that any program designed to produce 2.5 million jobs, even assuming that it could succeed, is nowhere near ambitious enough if we are about to lose 3 million jobs as the Big 3 Automobile companies and their supply chains go bankrupt, officially, or unofficially. And, frankly, the 3 million figure is low because it does not take into account the cascade of additional failures that will ensue when these companies die. They themselves are counter parties to derivatives and hedge funds and banks are players that have written derivatives in the trillions, derivatives that will be triggered by Big 3 insolvency.

No one, and I mean no one, can imagine the carnage that will ensue. Nor is $25 billion going to solve anything.

These companies need business. They are unprepared for a brave new world of high speed rail, trolley cars, and, one hopes, bicycles rather than horses and buggies. They had years to get ready for electric cars. They wasted those years.

Source: http://www.fee.org/publications/the-freeman/article.asp?aid=4145