So, Will They Learn From History?
My previous blog had a couple quotes.
So, Yves has nicely posted what history has taught:
"Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance."
"Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.5 Of course, the caveat to these findings is that a counterfactual to the crisis resolution cannot be observed and therefore it is difficult to speculate how a crisis would unfold in absence of such policies. Better institutions are, however, uniformly positively associated with faster recovery. "
What history has taught is the Austrian economics ultimately come true and this Miskin $hit simply runs the economy to the ground, working at first nicely like a pyramid scheme, at least that's my take on it. At the end of the road you ultimate have the truth in Austrian economics. The crap that is being taught only works mid cycle and constantly leaves a mess.