State interventionism in economy & its limits
Now that state interventionism has been re-established as a principle guiding the formulation of financial policy even in America as well as Europe, the next strategic question is whether that principle would be abused or misused, or become out of control, leading to arbitrary and indiscriminate intervention as well as over-regulation of the economy like what the bureaucrats of the former USSR did in the entire 1970s. Excessive and obsessive spending on military hardware and force size for expansionism during the same period further strained the already ossified and stagnant economy to the point of implosion of the polity. In the specific and concrete context in Malaysia in 2008, the topmost concern should be whether the ideological shift in the USA as well as Europe would be exploited abstractly and also opportunistically to re-legitimatise the race-based 'affirmative action' or 'social engineering' programme, which has been eroding the competitiveness of the real economy and retarding the growth of its human resources for years.Lin Yifu: China could weather financial storm
posted by James Wong Wing-On at 9:15 PM
2 Comments:
There's no appetite in either the Government or the public in the US for extensive state ownership and control of the economy.
The current governement actions are a recognition of the depth and extent of the emergency in the financial sector.
I fully expect the US government will disengage from its current direct market intervention as soon as is practicable.
But there is likely to be a push for greater regulation of some sensitive sectors such as banking and securities trading. Some of which is, in hindisght, clearly needed to prevent abuse of the market
of course, no one expects the US or even China and Russia in 2008 and beyond would become the USSR in the 1970s. i was only contrasting the extremes for the middle paths to be more clearly seen. cheers.
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