MISES DAILY, 30 de Dezembro de 2011

"A popular argument (employed and nourished by more than a few prestigious economists like Schumpeter) holds that credit expansion and low interest rates facilitate the introduction of technological and entrepreneurial innovations, which foster economic development. The argument is contemptible. In a market economy it is as important to provide financing for solvent, viable entrepreneurial projects as it is to deny it for nonviable, harebrained ones: many "entrepreneurs" are like runaway horses, and we must limit their chances of trampling on society's scarce resources.

The problem is that only the market is capable of distinguishing between these two types of projects, and it does so by a social process in which key elements are precisely the indicator of the real amount of saved resources and the social rate of time preference, which helps separate the projects that should be financed from those whose time has not yet come and which therefore must remain "in the pipeline." It is true that every artificial expansion of credit and of the fiduciary media that back it provoke a redistribution of income in favor of those who first receive the new available funds and that this does not permit us to theorize about the net effects the process will have on society's real saving. (That will depend on how the time preference of those who come out ahead compares with that of those who come out behind.) However, there are more than enough signs that inflation discourages real saving, if only because it generates an illusion of wealth, which stimulates spending on consumer goods and capital consumption."

ou então:

"3. Is It True that Banks Caused the Crisis by Incurring Risks Disproportionate to Their Capital?

To attribute the crisis to the bad conduct of bankers is to confuse the symptoms with the causes. After all, during the stage of speculative euphoria, bankers merely responded to the incentives (null or negative real interest rates and the artificial expansion of credit) created by central banks. Now, in a display of hypocrisy and manipulation of the citizenry, central bankers throw up their hands in horror, blame others for the consequences of their own unsound policies, and try to appear as saviors to whom we must be grateful for the fact that we are not in the grip of an even more severe depression. And we need not repeat that it is precisely during the boom stage that inflation in the prices of financial assets was so high that bankers were able to show considerable equity capital in their balance sheets, which, at least in appearance, gave them substantial leverage and permitted them to incur risks with little difficulty. This was all in an environment of null or even negative real interest rates and an extraordinary abundance of liquidity promoted deliberately by central banks. Under such conditions, no one should be surprised that increasingly, peripherally, financing was granted for investment projects that were more and more risky, and less and less profitable (and less certain of producing profit)."

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