I don’t normally quote Wikipedia, but it is a good place to start when attempting to research a topic and since we are revisiting socialist economic theory, we might as well revisit Wikipedia and its social documentation theory.
So, we have Hayek and Mises who are discussing the economic calculation problem, and we are going to run into this problem with this planned economic recovery. It just simply isn’t possible.
By segmented stimulation, you don’t encourage the moderation of risk. In fact, you encourage excessive riskiness because of the ability to get bailed out. With people like Madoff who reportedly ripped off domestic customers, and now Stanford who reportedly ripped off foreign governments like (possibly) Chile, Antigua, Caracas, and Colombia, you can obviously see that any limited monitoring of an economy can be gamed. The problem goes deeper than just monitoring because as people become monitors, they abuse that power.
The SEC didn’t take steps to stop the abuses, the FED is a private bank that sets the standard of economic policy within the US economy and partner banking systems [Every major country has a central banking system of which the FED is] and didn’t monitoring the growing problem with the citizenry’s welfare in mind. The Securities/Futures markets are proof of that. They are wholely beyond the realm of recovery and the “too big to fail” mentality excludes these massive systems from collapsing, again, removing moral hazard.
Enter the Cybersyn project that Chile undertook in the 70′s to direct economic growth through stimulating certain systems when they are too fast, or too slow. Simply put, the system monitored the manufacturing processes, and delivery methods, and many other factors, to optimize the process. The model simply cannot work unless EVERYONE has the ability to monitor the processes in the economic system, not just those with the means to act. It is imparative that those with the means to act responsibly do so, and that they encourage others to act responsibly. We start to transcend the greed of “Me” and cross over to the Whuffie of “We” which allows for credit to be given where credit is due, but not to the point where it harms others as we have tended to go lately.
There is a lot more to this discussion…