Capitalism Afterthought

Since my last post, I've read The Ascent of Money, by Niall Ferguson. It gives a great description of the development of the financial system. It turns out that early in the history of stock markets, there was an event called the Mississippi Scheme. It was one of the first examples of the kind of bubbles we've seen recently with mortgages and 10 years ago with the "dot com" companies. It also can be considered a failure of centralized economic planning!

I would like to add that my previous remarks about what capitalism ought to be were reflective of a capitalism based on more of a Puritan/Calvinist ethic. Capitalism can have an ethical base or an unethical base. Hopefully the unethical type has negated itself!

With regard to the bailouts and stimulus package that have been passed since then, I have no idea if they will work. Hopefully investors will buy the "troubled" assets and be able to do something good with them. I'd rather government spend less than more, and it appears that people have lost a lot of trust in government, Barack Obama's election notwithstanding. Trust in government or lack thereof says nothing about its competence, necessarily, but we know what happens when government spends more money, especially if it prints it - inflation. Everybody loses then.