“Treasuries Tumble,” announced a cover of Barron’s recently. Oh my. Long bonds are down 20% since January.
Pity the poor Chinese. They’ve got $768 billion worth of them.
And pity poor Tim Geithner. He’s over there right now on a fool’s errand, lying to the Chinese:
“Geithner Tells Chinese its Holdings Are Safe,” says the Washington Post.
Reuters went on to report:
“His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.”
More on Geithner’s visit to China later in the week…
“Those people did not become French in the last five months,” says Mitch Daniels, Republican governor of Indiana.
He was referring to the people who re-elected him. His point was that Americans are not necessarily in favor of socialism. They may be fed up with what they see as the failures of capitalism. But they’re not ready to vote for Nicholas Sarkozy.
But the country has clearly moved towards more government intervention in the economy. In 1986, 40% of Americans thought government regulated the economy too much. Now, 40% think it doesn’t regulate enough. And get this… The Economist reports the results of a worldwide poll. When asked if “people [were] better off under free markets,” 75% of Indians say ‘yes’ and so did about 72% of Chinese. But put the question to Americans and only about 69% think so.
Even Italians are more in favor of free enterprise than Americans. Go figure.
The Economist passes along the thoughts of an American lawyer to explain it:
“The disaster in the housing and mortgage markets shows that free markets don’t always get incentives right or generate the information people need to make wise decisions. There may be times, he adds, when government is better suited to giving people the information they need.”
Information? What information was it that people didn’t have? All the information was not only available – it was free. We reported it here at Markets and Money – for free. Day after day…we read the headlines and passed along the statistics. What was hidden from view? What was unknown?
This information was available to the government too. Its thousands of regulators, representatives, researchers, and consumer advocates had computer terminals and newspaper subscriptions. They even had thousands of PhDs in economics whose JOB IS TO STUDY THE ECONOMY!
If government were really able to give “people the information they [needed],” you’d think that one of these earnest meddlers would have whispered to Secretary of the Treasury…or maybe to the head of the Fed: “Hey…better tell the voters to watch out…this thing is getting out of control.”
But do you remember a word from the Secretary of the Treasury…from the Fed…from the SEC…from the other busybody parasites who live on the public payroll? We don’t. All we remember is how they told us to “buy an SUV” and how derivatives “spread the risk to those who are able to bear it” and how “subprime mortgages help increase home ownership.”
The government, do a better job of running the economy? Ha. Ha.
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