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Showing posts from December, 2008

Friedman foresaken

Was Milton Friedman right when he said that a government solution to a problem is usually as bad as the problem ? 2008 has turned out to be far worse than suggested in my December 2007 post. The US government has shovelled trillions of dollars into financial institutions but the liquidity issue refuses to walk away. America has seen unprececdented government market intervention. One sees Uncle Sam's hands all over corporate America. What started off as a subprime mortage fiasco has sipped into the real economy. Everything from commodities through stocks to retail sales has been affected by the financial market implosion. This crisis has claimed several giants. The Big Three US car manufacturers are living off government goodwill. Fannie Mae and Freddie Mac are under intensive government care. Citigroup, once the biggest bank (market capitalisation), is suckling from the state. What does the year 2009 have in store for the US economy? Expect to see less US influence i