Tim Worstall What we all seem to think in common is that we have now, beyond doubt, reached the point where the current economic system is utterly unsustainable.
Rightie Ho.
The neoliberal process Thatcher and Reagan put in place, based on the thinking of Hayek and Friedman, promoted the idea that ever-increasing financial wealth mattered more than meeting people’s real needs, and this was always bound to fail. You can increase a house price as many times as you like, but you create no new wealth for society as a result. At some point, the financial claims based upon this false understanding of wealth were bound to collapse, and I think John, Guy and I all think that this moment is arriving.
Isn’t it just lovely that house prices have been falling for a few years now. Raising interest rates was all it took too. But, of course, increasing interest rates is, as the Elyian thinking goes, the wrong thing to do.
But, of course, falling real house prices are evidence of the failure of neoliberalism. Not the inevitable result of reversing QE, ho dear, no. To think that would be to misunderstand the intricacies of FatControllerThought.
The post From The Sage first appeared on Tim Worstall.
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