Inducing the Madness of Crowds After losing a fortune speculating in the South Sea Bubble, Isaac Newton reportedly said that he could calculate the motions of heavenly bodies, but not those of the madness of crowds. Today, millionaires and billionaires are pretty much united in the proposition that even kind of social provision must wither in order that the state can afford to clean up the mess that the wealthy have created.
In addition, raising their taxes is not only unfair, but destructive of health of the economy. Yves Smith's opinion piece in the Times, largely lifted from her wonderful book, ECONned, reports how corporations are hoarding their cash. They have also been investing in their own stock, which raises executive bonuses, which helps to amplify the obscene redistribution of income. Of course, common sense shows that austerity is the worst policy in the face of an economic decline. In a market economy, without consumer demand, business activity dries up. I can understand why the millionaires and billionaires promote their self-interested ideology. I can also understand why the democrats have joined in the millionaire and billionaire ideology rather than upset their base -- the millionaires and billionaires.
More at
http://michaelperelman.wordpress.com/2010/07/09/inducing-the-madness-of-crowds/
-- Michael Perelman Economics Department California State University Chico, CA 95929
530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com