Confidence is a rare commodity.
Most people have optimism - that things will be better.
Or, things will get worse first before they get better.
Much of optimism comes from straight-line projection, even if that straight line will come after a turning point.
But most people do not know how to forecast the turning point - the conditions under which a situation will change drastically - from good to bad or from bad to good.
That's why modern-day policymakers are very boring.
They keep pushing the trend as if the sky is the limit.
Until they hit the wall - and they do not know what hit them.
Malaysia's economic policy in the early 1990s was optimistic about privatisation - how to fool the public - until the public took all the cash out of the country - and the leadership cried blue murder - and changed the rules to suit his own narrow ignorance.
Greenspan pushed the monetary limit until the global financial collapsed - and blamed it on lack of regulation of derivative financial instruments - which are nothing more than the multiplier working overtime.
There is wisdom in economic theory which teaches the need to search for stable systems - the need to keep things within practical bounds.
There is no magic in the real world of blood, sweat and tears.
Those who have had it good have had it good at the expense of the unfortunate - before those in a position of control have ego which blinds them from their social obligations as national leaders.
When the national leaders get richer, the general public gets poorer through inflation and devaluation.
Confidence comes knowing intimately how the artificial economic world that we have created works, its limits, and how it can collapse.
Confidence is shown by the courage of self-restraint by not stealing when no one is looking.
We are now so addicted to senseless monetary expansion until we do not know what to do with money.
We have lost confidence in our ability to make ourselves with little economic growth.
1 comment:
"Malaysia: Diving or Surviving?"
(http://is.gd/Ic02)
"On the economics of ethics .."
(http://is.gd/IbHB)
"Unless more details are provided, it is not possible to analyse the capability of its cyclical indicators in predicting turning points. Given that as the raison d’être of leading indicators, it is a serious omission in the reporting by the authorities."
(http://is.gd/IbRT)
"So why did models along these lines acquire such influence? Because they fitted in with a conventional wisdom that was developing for other reasons."
(http://is.gd/Ibvk)
"The top officials seemed to be the very embodiment of modernity in their trappings and transactions, but they were devoid of the sense of obligation and responsibility implicit in that concept. They "accepted" the idea of a mental revolution and of modernity, but interpreted it selectively so as not to impede the pursuit of their own self-interest."
(http://is.gd/I9un)
"The experience thus far suggests that the government revenue-generating, government deficit-reducing, private sector control-increasing and capital market-deepening official objectives of privatization have largely been subordinated to the ostensibly wealth-enhancing objective through rent allocation, particularly to the politically well-connected."
(http://is.gd/I9xF)
"The initial impact of the Asian financial crisis in Malaysia reduced the expected value of government subsidies to politically favored firms. Of the estimated $60 billion loss in market value for politically connected firms from July 1997 to August 1998, roughly 9% can be attributed to the fall in the value of their connections."
(http://is.gd/I9RX)
"it should be remembered that it was the reorganization of underlying "real" economic activity across national borders that ultimately helped accelerate the economic development of countries like Malaysia and integrate them more fully into the global economy. The emergence of a "new international division of labour" in the 1960s and 1970s and the spatial reconfiguration of economic activity via the disaggregation of production processes allowed companies to relocate their activities internationally and, in East Asia in particular, to take advantage of cheap labour or generous government incentives."
(http://is.gd/IaRD)
"Today, the prospects of a ‘rising Asia’ bring anxieties that Malaysia’s competitiveness is declining vis-à-vis its ‘regional neighbours’."
(http://is.gd/IaZB)
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