Mohacsy's Safe Portfolio Member Forum

[Elroy Jetson]

The study showing people with conservative beliefs react with three-fold more fear to an event can explain current events.

A "conservative" administration is in a panic to implement a $3 trillion welfare program to try to prevent poorly run firms from failing, prevent a recession - and prop up prices in the stock, bond, and real estate markets.

Normal market activity can be fear-inducing especially in people prone to fear.

So It's not surprising that fear is causing conservative people to react in an irrational manner, which John Bogle this morning characterized as "bordering on the insane".


Yet, from the viewpoint of economics Schumpeter had this to say:

"Policy does not allow a choice between depression or no depression, but between depression now or a worse depression later.

Inflation pushed far enough would undoubtedly turn depression into the sham prosperity so familiar from European postwar (WW-I) experience, and would, in the end, lead to a collapse worse than the one it was called in to remedy.

For recovery is sound only if it does come of itself. For any revival which is merely due to artificial stimulus leaves part of the work of depressions undone and adds, to an undigested remnant of maladjustment, new maladjustment of its own which has to be liquidated in turn, thus threatening business with another worse crisis ahead."