Re: ECON: When capitalism falls on its sword

From: Technotranscendence (
Date: Fri Jan 18 2002 - 19:53:08 MST

On Friday, January 18, 2002 6:19 PM Robert J. Bradbury wrote:
> A fairly good editorial by Paul Krugman in the NY Times
> today about "A System Corrupted" regarding the Enron affair.
> See:

This is, of course, the same Krugman who thought the WTC attacks would
be good for the economy. Who never met an inflation he didn't like or
an economic freedom he didn't hate. Who thinks government is the
solution to every last economic problem regardless of theory and

Aside from this, the real problem with Enron is not some market failure,
but government encouragement and support of risky behvior.

If there were no corporate bailouts (remember Chrysler?), no government
subsidies (think Boeing), no investors bailouts (e.g., Mexico, East
Asia, Russia, and probably Argentina), and myriad other government
intereferences in economic activity, people -- like those who worked for
or invested in or sat on the Board of Enron -- would be much more
careful of where they put their money. Instead, we have a system now
that encourage wreckless behavior at public expense. Just remove the
public expense part and it will correct itself over time.

In real world markets -- and presumbly in totally free markets, if we
ever get them -- businesses fail. Business failure is not a
condemnation of the system per se. It's a fact of life and, in a way,
the means by which market economies correct inefficient economic

On the personal side, each of you on this list can pay less attention to
pro forma and operating earnings -- or anything that smacks of
accounting tricks. The usual disclaimer applies: If it sounds to good
to be true, then it probably isn't true.


Daniel Ust

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