02-02-2018, 11:46 PM
Indeed, one of the arch-conservative heroes of economics on the Right, Friedrich Hayek, made clear that any economic bubble is a disaster waiting to strike. The bubble draws capital away from activities not so obviously profitable at the time by offering quick profits so long as the bubble keeps going. People fail to realize that they are investing in something inherently worthless. The ensuing panic does not destroy the value of the wasted assets; it simply demonstrates that the assets have become worthless or are nearly so.
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If I had the power to determine what to tax, then speculative activities would be at the top of the list. At least tax revenues can be put to alternative uses, like paying off debt, building infrastructure, promoting learning, and alleviating poverty. The political climate in which a boom occurs prohibits such. Maybe people would get the message that it is wiser to invest in job-creating plant and equipment or starting small businesses that have a better chance than a scam disguised as an investment.
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If I had the power to determine what to tax, then speculative activities would be at the top of the list. At least tax revenues can be put to alternative uses, like paying off debt, building infrastructure, promoting learning, and alleviating poverty. The political climate in which a boom occurs prohibits such. Maybe people would get the message that it is wiser to invest in job-creating plant and equipment or starting small businesses that have a better chance than a scam disguised as an investment.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.