Timmy elsewhere

At the ASI.

Why we have financiers and why we probably need more of them.

3 thoughts on “Timmy elsewhere”

  1. I’m not sure you understand those who complain about financiers.

    What they really want us for us to give all our money to our omniscient state not some hard nosed capitalist. If only we’d given Gordon even more money we really wouldn’t be in such a mess.

  2. It’s best if bankers know their clients. So Ethiopian bankers for Ethiopian industry or agriculture seems like an excellent idea. But British bankers for Ethipopian farmers? Well, no. You seem to have conveniently forgotten the small matter of the Golden Age of capitalism – the quarter century that began not long after WW2, when international capital flows were fiercely controlled and bankers, including British ones, were “reined in.” It was the longest and best period of economic growth in modern world history – in country after country. After things opened up, growth rates tumbled and the financial crises began to appear. So no, things are not as this blogger would have you believe.

    Tim adds: This is one that always amuses me “the quarter century that began not long after WW2, when international capital flows were fiercely controlled and bankers, including British ones, were “reined in.” It was the longest and best period of economic growth in modern world history”

    That gets trotted out so often and it’s as if no one ever stops to think about the 20 years previous to that. A global depression and then a global war. Neither of which are all that good for economic growth but both of which work just fine in technological and productivity improvements. Two things which are bound to work through into economic growth after the depression and war are over.

    Or haven’t you ever heard of trend growth, reversion to the mean and so on?

  3. Oh indeed – there is never one single explanation for something so tricksy as economic growth. But you have done nothing here to demonstrate how exceedingly tight capital controls, marginal tax rates of 91% in the U.S. for much of that period, and that kind of stuff, have been harmful for growth. The evidence points squarely in the other direction, even if we all accept that correlation ain’t causation. You’ll have to work an awful lot harder than that, I’m afraid.

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