Every wonder what is going on in that manic, nicotine deprived brain of our lead pollyanna cheerleader Flint? Here is a guide of quotable quotes from the Flintmeister:

"The best way to understand that Y2K will not be a problem is to look at how little money is being spent by the lesser countries." - Flint (flintc@mindspring.com)

"Even if no one had lifted a finger toward remediation, [a 50% probability of a depression] is absurd. " - Flint (flintc@mindspring.com)

"If Y2K turn out to be bad, JIT will end up being beneficial to the recovery. " - Flint (flintc@mindspring.com)

"What I foresee is a world of delays, shortages, inconveniences, screwups, limited power and banking problems, and a reduction in both the quality and availability of medical care and communications. I see widely scattered but locally severe (up to Bhopal-level) crises worldwide." [then a few months later] "Y2K will be insignificant. " - Flint (flintc@mindspring.com)

"I know its a bad thing for the system, but all my money is coming out of the bank. " [then a few months later] "Banks are fine. " - Flint (flintc@mindspring.com)

"I agree with Hoff that we are already seeing [in Aug 99] a higher rate of failure than we will see during or after the rollover. " [then a few months later] "I don't agree with Hoff that we are already seeing [in Aug 99] a higher rate of failure than we will see during or after the rollover. " - Flint (flintc@mindspring.com)

"The TB2000 forum is dying [June 99]. " - Flint (flintc@mindspring.com)

"The FAA is not lying. They're being deliberately misleading. " - Flint (flintc@mindspring.com)

"You will notice that I made no claim that the progress is sufficient, I asked if the progress were recognized. " - Flint (flintc@mindspring.com)

"Governments should be amoral. " - Flint (flintc@mindspring.com)

And here's a list of our chief doomer's rants. Note that all of Flints comments are based on wishful thinking, self-reporting, or some type of psychotic delusion. Note that almost all of Milne's comments are based on company reports, news articles, government statistics, financial statements, Murphy's law corollaries, and expert opinion:

1. Milne: Is this what the IMF means when they say the Global Economy has recovered?
2. Milne: Pollyanna Spin now in full swing
3. Milne: Bubble.com
4. Milne: BOA "expects", "anticipates", "believes", "estimates" your money is safe. No guarantees through.
5. Milne: Rumors of martial law
6. Milne: Taiwan will not recover in time for Y2K
7. Milne: Asia falling further behind
8. Milne: Why Governments Will Not Tell The Truth
9. Milne: Another dose of Nytol for Flint
10. Milne: Some Melatonin for Hoffmeister
11. Milne: A warm glass of milk for Flint
12. Milne: Days numbered for the House of Cards
13. Milne: Israel, supposedly one of top 10 best prepared, now said to have "Ignored Warnings"
14. Milne: GAO says health industry compliance statements misleading
15. Milne: Six Out Of seven Most Populous Nations Are Among The Worst Prepared
16. Milne: Flint, are you sure this is UK's Gary North?
17. Milne: NZ warns of three month interruption of essential services; concerned that citizens are not preparing
18. Milne: An example of the compliancy myth: Ericsson Systems
19. Milne: Officials who last year shrugged Y2K off as a Bump-in-the-Road now predict SEVERE GLOBAL PROBLEMS
20. Milne No fan of Senator Bennett (Part III)
21. Milne: Y2K Scapegoats
22. Milne: More "Y2K Jitters" for Mr. Decker to ignore
23. Milne: Why the US is Fatally Tied To The Global Economy
24. Milne: China poised to devalue its currency; get ready for Asian Flu II
25. Milne: Poole says GAO report on unprepared cities is part of "Vast Rightwing Conspiracy"
26. Milne: This may help you decide your bugout date
27. Milne: False sense of security about Y2K emerging
28. Milne: DC on fast track to the crapper
29. Milne: Gartner Group now rates US at 12th in remediation status
30. Milne: Attention Pollyannas: FBI Agent says "This is a Clue"
31. Milne: When "Y2K Ready" does not mean Y2K Ready (much less "compliant")
32. Milne: UK Y2K expert says 33% of top firms failing remediation, may go bankrupt
33. Milne: Pay no attention to that Bear behind the curtain
34. Milne: Hoff, are you "ready"?
35. Milne: New research says US imports will be "badly hit" even in BEST case scenario
36. Milne: Blind Faith Of Managers
37. Milne: Solution to Japanese debt bubble: Apply patch, inflate bubble larger.
38. Milne: Y2K to dramatically increase starvation in third world
39. Milne: Dealing with Y2K failures in the midst of Y2K failures
40. Milne: California Dreamin'
41. Milne: For Flint, an example of spin and distortion in a Milne posting
42. Milne: See ya
43. Milne: Boston Herald says "the outlook is bleak"
44. Milne: Koskinen Lies Again
45. Milne: Trashing The Idiotic "Y2K Will Be Like Three Day Storm"
46. Milne: Clue-By-Four
47. Milne: Australia: A Parable Of Non-Compliance
48. Milne: Brokerage Firms Miss Deadlines
49. Milne: The Job Is Not Getting Done
50. Milne: Japanese Federal Government Spending 1/42 Of What We Spend
51. Milne: Half of the nation's 6,000 hospitals will not be Y2K compliant by 31 Dec
52. Milne: Chaos in 90 days
53. Milne: Japan's Banks: White Wheat or Raisin? (with help from PNG)
54. Milne: For those who say Milne has never been right
55. Milne: one more "spoof"
56. Milne: And while you're at it...spoof this too
57. Milne: Spoof THIS
58. Milne: Today's example of pollyanna spin
59. Milne: Y2K comes early to Serbia
60. Milne: Fat lady is singing
61. Milne: Trouble brewing up North
62. Milne: Water supplies at risk despite pollyanic reassurances
63. Milne: Another challenge for pollyannas
64. Milne: The Readers Digest version of Y2K
65. Milne: A Pollanna Is Nothing But A Selfish Human Being
66. Milne: Ireland "Completely out of Touch" with Y2K (warning: offensive language)
67. Milne: Iraq and Y2K Poisonfire
68. Milne: Why are Wall Street securities firms preparing to SLASH their assets due to a "minuscule risk"?
69. Milne: Say goodbye to Venezuelan oil
70. Milne: The Collapse Of Indonesia
71. Milne: Beginning of The Y2K Panic Sell-Off
72. Milne: Why do pollyannas waste their time discussing y2k?
73. Milne: European airports heading for millennium computer crash
74. Milne: Government Y2K director cites potential for 1-2 weeks without power
75. Milne: DoD is floundering
76. Milne: Get out of Atlanta
77. Milne: NONE of California's utilities are ready yet
78. Milne: Ask Bozo If He Is the 'Best' Clown Ever
79. Milne: 16 Reasons Why Self-Reporting Is Specious
80. Milne: More Ignorant Hoffs
81. Milne no fan of de Jager either
82. Milne (still) not a fan of Senator Bennett
83. Milne on Russia, North Korea and Y2K: What Pollyannas don't want you to know
84. Milne: Yet Another Government prepares for Y2K in a Bunker
85. Milne offers pollyannas an arithmetic lesson
86. Milne on AT&T's announcement that it may go "Chevron"
87. Milne on the Great Geek Migration
88. Milne not a fan of Senator Bennett
89. Milne: Recession in Latin America worse than IMF expected
90. Milne: Japan: She Loves me, She Loves Me Not, She Loves me...
91. Milne-US GDP Plunge

Now, if you're still on the fence about preparing, decide who makes more sense.

-- a (a@a.a), September 28, 1999

Answers

Is this really necessary?

Yawwwwn!

-- (dot@dot.dot), September 28, 1999.

I have met Flint and found him to be civil, gracious and generally good company. Of course, he did have the benefit of nicotine and excellent beer. While Flint has been a lightening rod of controversy, he has generally avoided verbal slugfests. Our occasional disagreements have been marked by mutual respect.

I have not met Paul Milne, but I have read a fair number of his essays... usually cross-posted by "a." As I read Milne, he clearly thinks the world (as we know it) will end due to Y2K. Clearly, Milne hates the federal government and our nation's capitol. I chastized him for gloating over the potential destruction of this largely African-American city by quoting the Rev. Martin Luther King, Jr. I also needled Milne for his accepting a government subsidy while attacking the government itself. Frankly, it seems rather hypocritical. Finally, Milne's modus operandi is bombastic rhetoric (and profanity). In his opinion, anyone who disagrees with him is a scum-sucking @#$%^&*.

While some find this form of argument compelling, I (and many thoughtful people) do not. In fact, Milne's attacks border on emotional instability. Were I a serious pessimist, Milne is the LAST person on the planet I want representing my cause. Even Gary North can frame a decent argument and provides a useful web site (by some accounts.) Frankly, I think he's a bit of an embarrassment to the more reasonable pessimists on the forum.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Here, here! And might I add you people are all bizarre.

The Freak...

-- Typhonblue (typhonblue@hotmail. com), September 28, 1999.

Lane Core posted a terrific link to the IEEE site today. There you can find a Technical Information Statement from their Y2K focus group. (.pdf, 36 pages)

http://www.ieee.org/organizations/tab/Y2kFocus_tisrel11.PDF

It's a startling document for many reasons, but one of their main points is that after extensive analysis, they persuasivly state that absolutely no one has (or can have) any idea what will happen, but that those on the extremes of opinion ("Pollyannas" and "Chicken Littles" are both almost certainly wrong.

Worth a read.

-- Lewis (aslanshow@yahoo.com), September 28, 1999.

Hey Ken - is that the best you can do? I cross link almost 100 hard hitting Milne rants and contrast them to a dozen of Flint's mealy-mouthed BS quips and all you can say is that Paul can't be taken seriously because he receives an earned income tax credit, he senses absolute corruption in government and sometimes uses bad words?

I guess if Milne was more "civil, gracious and generally good company" you'd be compelled to take his overwhelming evidence to heart, is that it?

-- a (a@a.a), September 28, 1999.

There have been times when I have disagreed with Milne, occasionally violently (cf his comments on Harlan Smith's death which I felt were despicable, even though I understood his argument). Regrettably, we live in an age that feigns toleration behind sarcastic, polished sneers of poisonous bile.

Not all ages have considered that an advance.

Our own history is replete with people who took life, liberty, the pursuit of happiness and truth (which binds them together) so seriously that they fought each other verbally and, later, militarily to decide the result (I won't comment on the nature or consequences of that result here).

I am not embarassed by Milne in the slightest. Quite the opposite.

-- BigDog (BigDog@duffer.com), September 28, 1999.

Hard hitting? Milne is angry Y2Knewswire... all spin, all of the time. The short answer... Milne cannot be taken seriously because he does not make a serious argument. Or do you consider proximity to 7- 11 an accurate modeling tool for the prediction of social unrest? (laughter) I do not agree with Flint, but it is possible to argue with him.

Big Dog... the Pope is not embarassed by the Jesuits either.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Ken -- That was pretty funny. Hmmm, I'm not sure about the Pope! I'll defer to my Catholic friends on that one.

-- BigDog (BigDog@duffer.com), September 28, 1999.

a,

Nice spread of *hot coals*. I cant wait to see if Flint will even attempt to tiptoe through this thread.

Ken,

"I also needled Milne for his accepting a government subsidy while attacking the government itself. Frankly, it seems rather hypocritical."

Do you really think it is hypocritical for an individual to use legal avenues of recovering monies they forfeited *without prejudice*?

"While some find this form of argument compelling, I (and many thoughtful people) do not."

Smarmy, to say the least. If you want to take a poke at those who find Paul's arguments compelling, it would be better to do so in a straight forward manner, No?

"In fact, Milne's attacks border on emotional instability."

I see that you are now a practicing psychologist. Amazing versatility!

"Frankly, I think he's a bit of an embarrassment to the more reasonable pessimists on the forum."

What gives you the right to determine what should or should not be an embarrassment to another individual?

Your pretence of civility is pure horsehocky. Paul Milne might be abbrasive, but his comments are all in the open. You, on the otherhand, are of the disingenuous ilk that cries for peace while throwing a blindside with all your ability.

-- (cujo@baddog.byte), September 28, 1999.

Russ, the Jesuits are often called the Pope's "shock troops."

Cujo... the phrase that comes to mind is biting the hand that feeds one. You want to be a tax protestor... fine. You want to engage in civil disobediance... fine. Just take some responsibility for your actions. Read "The Just Assassins" for more info.

If you want it straight... Milne is wrong. The world is not going to end on January 1st. Society will function. The Republic will survive. Now, if Milne were simply wrong, we would not have this discussion. Abrasive? What is your threshold for "rude?" Does Milne have to take hostages before you call him "impolite?" Like SOME pessimists, you forgive Milne his inappropriate behavior because you happen to agree with him.

What a load.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Hey Ken "What a load" Decker - now that we've seen a 30% rise in gold over the past 48 hours, do you have any more advice we can disregard?

Gold is nothing more than a "barbaric relic" - Ken Decker

What a load indeed...

-- a (a@a.a), September 28, 1999.

a,

Great... let's base a monetary system on a commmodity that can increase (or decrease) wildly over short periods of time. (laughter)

With the soft equities market, I'm sure you'll see some interesting speculative plays in gold... but as with the market, what are the underlying fundamentals? Is gold really worth substantially more than it was one week ago? How is overvalued gold different than overvalued equities?

I'm a value investor, "a." My perspective is not this week, or next week, or even next year. While boring to some, I take the long view. Let's compare portfolios in say, 20 years.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Ken, I find it unbelievable that you can say "Milne is wrong". It isn't "Milne" that Milne, is talking about - IT'S THE INFORMATION THE LINKS PROVIDE!!!!!!

It is not the delusional fantasies of his own brain - Flint, from what I've seen, is only talking from what he supposes to be - IN HIS OWN LITTLE HEAD.

Milne might, like me, not understand how a human being can confuse the difference in something so vastly opposite! How is it a truck or something hasn't run you over????

In answer to the question, "If Man is so stupid (as to let Y2K be TEOTWAWKI) then, how did he make it this far?

The answer is - - Because there weren't people like you and Flint in charge of anything IMPORTANT - until now!! That's why us GI's are scared shitless! (Pardon me)

-- Gregg (g.abbott@starting-point.com), September 28, 1999.

Greg,

In the words of Sherman T. Potter, "Horse Fritters!" Milne uses the Y2Knewswire approach... selective listening. He cuts-and-pastes snippets that support his particular point. Now, you can believe Milne when he talks about bank runs... or you can listen to the FDIC, the Federal Reserve, the Treasury Department, or the banks themselves. Or you can listen to Milne on utilities... or you can listen to the NERC and the public utilities in your area. How about the Y2K experts themselves like the Gartner Group, Ed Yardeni's 100- day panel, the IT trade press, etc. Most responsible experts predict some Y2K-related problems... perhaps enough to create a downturn in the economy. Only a handful of folks (like Milne) predict the apocalypse... even Ed Yourdon hedges his bets.

Now, if Milne had some solid data supporting his theory, I'd give it due consideration. Instead, he selects the speculations that suit his theory and attempts to weave them into an argument. Try this, Greg, give me the ten best DATA that support Milne's "end of the world" scenario. Try to condense them into one or two sentences... like I did with my "Polly arguments" thread.

What are the best points? We caught some agencies lying to us about Y2K? Software metrics "proves" we cannot solve the problem?

In answer to the question, "If Man is so stupid (as to let Y2K be TEOTWAWKI) then, how did he make it this far?

The answer is - - Because there weren't people like you and Flint in charge of anything IMPORTANT - until now!! That's why us GI's are scared shitless! (Pardon me)

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Mr. Decker, in regard to basing our monetary system on gold, you said:

Great... let's base a monetary system on a commmodity that can increase (or decrease) wildly over short periods of time. (laughter)

I completely agree. Gold is worthless as a medium of monetary exchange. We did the RIGHT THING when we switched to a central banking system, and ultimately came to base our monetary system on NOTHING.

Yup. You bet.

-- Dennis (djolson@pressenter.com), September 28, 1999.

Ken,

"Cujo... the phrase that comes to mind is biting the hand that feeds one."

If you're contending that the government is responsible for feeding its populace, it makes you a Socilist by definition. Is this your point?

"Just take some responsibility for your actions."

Very good advise for all of us to follow.

"If you want it straight... Milne is wrong. The world is not going to end on January 1st."

Where and when did Paul Milne EVER say the world was going to end on January 1st. This is and abhorrent misrepresentation of his position.

"Society will function. The Republic will survive."

These are very bold statements and I hope you are correct in your assessment of our future.

"Now, if Milne were simply wrong, we would not have this discussion."

Please extrapolate on who you are referring to as 'we' and which 'discussion' is at point.

"Abrasive? What is your threshold for "rude?"

Obviously it's (my threshold for "rude") beyond the point it would keep me from reading, contemplating and resonding to your posts.

"Does Milne have to take hostages before you call him "impolite?"

The intellectual effort you put into this question must have enormous.

"Like SOME pessimists, you forgive Milne his inappropriate behavior because you happen to agree with him."

Like SOME arrogant, pompous individuals, you are ascribing to me a point of view (pessimist) and an action (forgiving Milne) that are not true. Paul Milne has never done anything to me that would require my forgiveness. At the very least you are being intellectually dishonest.

"What a load."

Yes, another *buttload* delivered by "Mr. Decker"

-- (cujo@baddog.byte), September 28, 1999.

When all's said and done, this time five years from now, you guys will wish you had spent this time with your friends, family and loved ones instead of bickering about stupid inconsequential shit.

Miline is extreme, Flint is conservative. Both are wrong and right depending on your view point. I prefer to cherish life rather then the meaningless moral/mental/physical high ground.

The Freak

Dichotomy sucks eggs.

-- Typhonblue (typhonblue@hotmail.com), September 28, 1999.

The bottom line is that by 2001, Paul Milne's vision will be much closer to reality than will Flint's. I do not look forward to that Ken, and I think that a positive outlook is only useful after we have overcome the denial.

And I might remind you that only five short generations ago Americans sat in the same spot where I now correspond to you from and vehemently insisted that "their Republic would survive." They were wrong.

-- a (a@a.a), September 28, 1999.

Except for the fact that most of these quotes aren't accurate and all of them are taken out of context, I fail to see how they work to my disadvantage.

When the information available is badly insufficient, ambivalent, unreliable, often contradictory, and rapidly changing, you would expect that any opinions or conclusions you base on it would need to change accordingly. Y2K is undeniably a moving target, in terms of the information we receive. When you're in a boat on a tossing sea, you'd better move with the boat unless you can walk on water. This is called "learning."

Milne *starts* with his convictions carved in stone. He defends these convictions using three basic techniques: (1) He exaggerates or distorts any information he can to fit his convictions; (2) He dismisses anything he can't distort as 'lies'; and (3) He personally attacks anyone whose opinion differs. And he attempts to hide these techniques behind a braying-ass writing style. This is called a "religious conviction."

Is it any wonder that he becomes less coherent and more virulent as the gestalt of available information trends away from his convictions? Behaving this way is a *lot* easier than trying to learn, of course, but I'm rather surprised 'a' admires it so much.

-- Flint (flintc@mindspring.com), September 28, 1999.

Dennis,

If you suggest your greenbacks are worthless... please send your extras to me. I'll pay postage. By the way, point out the developed country WITHOUT a central bank.

Cujo,

I can dig out the thread where Milne made his specific economic predictions for 2000. Let me give you the executive summary; virtually no economic activity will occur in the U.S. post Y2K. The banks will fail, the markets will fail and riots will ensue. Oh, and please feel to disagree with Milne and see how you're treated then.

"a,"

Did I miss the memo on the Republic's death? And by the way, I see you have learned the "Milne" way. You selected the Flint quotes that served your purpose. OK, here's my guess. You're real name is Mike Adams of Y2Knewswire. Just stay in touch after the rollover... the 'net will be up and I'll look foward to hearing from you. I'll log in on Jan. 1, as the power remains on, and post.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Ken: I realize you are trying to dilute my argument, but I was referring to the Confederate States of America. Remember them?

And why do insist on narrowing your focus to one element of the y2k dilemma such as whether on not power will remain on? Did we have to have some kind of power failure to trigger the Great Depression? You're the supposed genius on the that economic episode, yet time after time I make you appear academically anemic.

And no, I'm not affiliated with Y2KNewswire. I have a technical background, 16 years of designing, coding, integrating and testing software and hardware systems that are so complex you wouldn't even understand their purpose.

-- a (a@a.a), September 28, 1999.

Mr. Decker,

The only reason our "fiat currency" has any value is due to others FAITH in it. If that FAITH falls, that "money" is just PAPER with pretty designs on it.

-- Dennis (djolson@pressenter.com), September 28, 1999.

"a,"

And who ever said you don't have a sense of humor, "a." Sorry, but the CSA is not (nor ever was) the Republic. Perhaps you remember, the South left the Republic... briefly.

After giving you history lesson after history lesson, you still insist? The Great Depression was the result of multiple economic factors (none involving technological failure). The depression was lengthened by poor public policy decisions including tight monetary policy, high tariffs, a restrictive gold standard, an unsound banking system, structural poverty, etc. Oh, yes, the speculative stock market bubble bursting created some problems, but the depression was caused by an economy with deep underlying problems including the struggle to transition from an agrarian society to a more industrial economy. Here's a test question... in the 1930s, why did Japan and Sweden do reasonably well?

Now, I'll promise not to design any electronic systems or code any programs. Why don't you volunteer to step off the platform as an amateur economist and social critic.

Dennis,

Does this mean you aren't sending me any money?

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Red,

I have disagreed with Milne and I have come down vehemently against his heartless metaphors for Y2K. He is passionate, filled with love and hate for people and the world in general. I don't like his writing style, but he seems to speak what's on his mind. At the same time, I continue not to be toast. I am a human being; at least, I was a human being the last time that I checked. I would like to meet Paul Milne, myself. Milne takes Y2K seriously; he is dead serious about the risks.

On the other hand, Flint's an egotist. His words are mostly insincere, dishonest, and unkind. He appears to lack a capacity for sympathy and empathy. In some text books, this very same description also describes a socipoath. Maybe, Flint is just having fun. And if he is just having fun, his satisfaction and his actions are inappropriate. I once was very much interested in meeting Flint. I was willing to drive down and talk with him. Now, I wouldn't waste my time. I'm sure the feeling is mutual.

Now, there's an unanswered question elsewhere for which I have been awaiting your reply. I think we should both concentrate more on economics than the thread fighting. If there's a severe recession or depression on the way, wouldn't it be neat if we could flesh out some predictions that came to reflect some reality. Of course, there's going to be some number crunching and we can use all the help we can get, but I think this is as good exercise in conversationing as any.

Sincerely, Stan Faryna

P.S. What's your problem with John Paul II? Neither you or I would fare well in any comparison to the man that was born, Karol Wojtyla.

-- Stan Faryna (faryna@groupmail.com), September 28, 1999.

Ken,

Your post said nothing about "no economic activity will occur in the U.S. post Y2K. The banks will fail, the markets will fail and riots will ensue". Your post did say and I quote:

" If you want it straight... Milne is wrong. The world is not going to end on January 1st."

It's no wonder folks like you and Flint draw so many colorful superlatives and adjectives upon yourself. I have to laugh every time you or Flint accuse a, Andy, BigDog, etc. of either taking statements out of context or deliberately putting words in your in your mouth. THEN, during your next breath, you come up with a gem like you just did. I am not saying any of us are beyond shooting ourselves in the foot. What I am saying is you do not stand on any higher ground than any other participants in this forum. When the cover of civility is removed, your vitriolic verbiage is clearly seen for what it is.

I can also say without hesitation that I have been castigated, to an exponential degree, with much more enthusiasm than I have witnessed from Paul Milne. I survived it quite well, thank you.

-- (cujo@baddog.byte), September 28, 1999.

Ken,

"Now, I'll promise not to design any electronic systems or code any programs. Why don't you volunteer to step off the platform as an amateur economist and social critic."

You could set a good example by *stepping off the platform" as an amateur mental heath provider!

-- (cujo@baddog.byte), September 28, 1999.

Ken: Who gives a shit about Sweden in 1930? This ain't Trivial Pursuit son. Stay focused and lets try a question from 1999:

If the US stock market crashes before the rest of the world has recovered, we will have another depression like the 30's" - financier George Soros, one of the world's wealthiest investors, quoted on the PBS documentary Crash

Question: Why are we to believe that a market crash is not imminent, and the bonus question, Why are we to believe that George Soros is wrong about the consequence?

-- a (a@a.a), September 28, 1999.

"Question: Why are we to believe that a market crash is not imminent, and the bonus question, Why are we to believe that George Soros is wrong about the consequence?"

a: this excerpt from "The Economist" might partially answer your question:

Freedom from fear?

Capitalism will always have dramas. It is governments that turn them into crises Before the Great Depression of the 1930s, the conventional view among economists, shared by businessmen and politicians, was that recessions were natures purgative. They had to be endured, but you felt better for it afterwards. This was fine if you had a country house in which to sit out the recession, but unlikely to make you love capitalism if you were queuing at a soup kitchen. This consensus view had something going for it, but it missed out an important point: if purgatives are made too powerful, they can be life- threatening.

What most people remember about the Great Depression, apart from the Wall Street crash, the dole queues and the Okies in The Grapes of Wrath, is that at first governments sat on their hands, saying the purgative had to be endured and they could do nothing. Then Keynes came along to argue that, on the contrary, they should do a lot because in a depression public spending was the only thing capable of boosting demand. Pay people to dig holes, if you must, and then to fill them in again. But whatever you do, spend.

Like most memories, this is accurate only in parts. And it gets the crucial bit wrong. Governments did not sit on their hands: instead they made things worse. A lot worse.

Americas central bank, the Federal Reserve Board, had helped bring about the crash in 1929 by raising interest rates. That may have been the right thing to do: America had had a huge speculative boom, albeit fuelled by the Feds previous loose monetary policy. But then the Fed kept its rates high well after the crash. In 1930-31, just when money was getting painfully short as banks cut lending to stay in business amid a liquidity crisis, the Fed reduced its own lending. And in 1931-32 it raised interest rates again after Britains decision to let the pound break free from the gold standard led to fears of gold outflows. Other central banks also raised interest rates.

Then, Congress and the White House joined in. In 1930, just when trade was needed more than ever to keep economies going, President Herbert Hoover signed the Smoot-Hawley tariff act, ignoring formal protests by more than 30 countries, sharply raising tariff barriers and triggering a worldwide spate of retaliatory protectionist measures. Chart 3, shows the terrifying result: world trade, already shrinking in 1929, fell by two-thirds by 1933. Finally, just when extra spending or lower taxes would have helped keep the economy going, most governments cut spending to balance their budgets. This last error is remembered because of Keynes and because of President Roosevelts New Deal spending programmes (though he was loth to borrow to finance them). But although budget balancing was damaging, it was probably less important than the monetary and trade mistakes, since government spending at the time was quite small in relation to the economy as a whole: only about 8% of GDP in America, though already 20-30% in most West European countries, including Britain.

Economists and historians are still debating exactly what caused the Great Depression, and doubtless always will. But most agree that government action turned what would have been a modest recession into the most devastating downturn of the century. Like other downturns, it certainly acted as a purge, but ended up almost killing the patient.

http://www.economist.com/editorial/freeforall/library/index_special_co llection.html

-- Mick Dodson (steady@sheslows.com), September 28, 1999.