{"id":1442,"date":"2009-02-24T20:05:16","date_gmt":"2009-02-25T03:05:16","guid":{"rendered":"http:\/\/arcanius.silverfir.net\/blog\/?p=1442"},"modified":"2009-02-24T20:05:16","modified_gmt":"2009-02-25T03:05:16","slug":"broken-windows-versus-banking","status":"publish","type":"post","link":"https:\/\/arcanius.silverfir.net\/blog\/broken-windows-versus-banking\/","title":{"rendered":"Broken Windows versus Banking"},"content":{"rendered":"<p><a href=\"http:\/\/arcanius.silverfir.net\/blog\/on-broken-windows\">Several days ago<\/a> I wrote about the broken window fallacy. Tonight while listening to Barack Obama address Congress, I grew troubled when he argued for supporting failing banks because &#8220;getting lending going again&#8221; would provide benefits that essentially mirrored what the broken window fallacy talks about: a young family that otherwise couldn&#8217;t would be able to obtain a loan to buy a house; some company would hire workers to build the house; the workers would have more money to spend in their communities; and so on.<\/p>\n<p>Recall what the broken window fallacy says:<\/p>\n<blockquote><p>The basic idea is that it is temping to think that a hoodlum breaking a baker\u00e2\u20ac\u2122s window stimulates the economy because the baker must go buy a window from the glazier, who then can go buy additional things from others in the community and so on.<\/p><\/blockquote>\n<p>It sounds strikingly similar, doesn&#8217;t it? I don&#8217;t think it is a coincidence. So, I immediately started wondering, where is the broken window in the lending example? When a bank creates money through a loan, whose window is metaphorically broken?<\/p>\n<p>My guess is that there is no specific victim, which is why this is so insiduous. Instead, the loser is, in some way that I don&#8217;t fully understand yet, a large group of us &#8212; perhaps all of us, and the winner is a small group. I am beginning to belive that the only way to not be hurt by the banking system, in aggregate, is to be partaking of loans yourself &#8212; to be leveraged yourself. Suddenly, it doesn&#8217;t seem too strange that this nation is addicted to debt.\u00c2\u00a0 It is simply the best response to a set of incentives enshrined in law by our government.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Several days ago I wrote about the broken window fallacy. Tonight while listening to Barack Obama address Congress, I grew troubled when he argued for supporting failing banks because &#8220;getting lending going again&#8221; would provide benefits that essentially mirrored what the broken window fallacy talks about: a young family that otherwise couldn&#8217;t would be able [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[7],"class_list":["post-1442","post","type-post","status-publish","format-standard","hentry","category-everything","tag-politics"],"_links":{"self":[{"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/posts\/1442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/comments?post=1442"}],"version-history":[{"count":1,"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/posts\/1442\/revisions"}],"predecessor-version":[{"id":1443,"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/posts\/1442\/revisions\/1443"}],"wp:attachment":[{"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/media?parent=1442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/categories?post=1442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arcanius.silverfir.net\/blog\/wp-json\/wp\/v2\/tags?post=1442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}