The major risk of immediate “front-loaded” fiscal austerity in the UK is that the painful cuts in spending, subsidies and public employment and increases in taxes will have a recessionary effect on an anemically recovering economy. By contrast, a credible early commitment to gradual fiscal consolidation to be phased in a more back-loaded manner would have reduced the risk of a double-dip recession while maintaining the authorities’ commitment to credible fiscal consolidation.

Whenever you hear pronunciations of how much money the TARP is making, check back and look at this list. It shows the TARP is deeply underwater.

But I am reminded of a quote from some UN Official: “You Americans never make simple stupid moves. You only make complicated stupid moves that make the rest of us wonder if we aren’t missing something.”

To get a really catastrophic misallocation of resources, it seems to take a government; corporations can only screw things up on an artisinal scale. For that matter, it’s worth noting that our government has spent the last seven decades trying to keep the price of housing low, and that much of that intervention, such as the creation of mortgage securitization, ultimately significantly contributed to the crisis. It’s worth remembering that at the time they were built, all those useless houses looked like prosperity. So too, massive mispricing in China may look pretty sweet–unless a hiccup suddenly leaves the government with a hell of an expensive white elephant. Or lots of them. As anyone who has contemplated purchasing a luxury car will know, just because something is really awesome, doesn’t mean it’s a good idea, economically speaking. Buying without knowing the price is dangerous no matter where you are.

Not since the populist movement of the 1890s has there been this much discussion of monetary structures among the public, and so much dissent about how money is created and circulated throughout the economy. It’s happening for a reason. The public is now paying attention to finance.

People will compete for positions of high authority in the government bureaucracy. What kind of people have the best chance of winning a power struggle? High-minded idealists are at a disadvantage in power struggles. People who intend only to help others are not likely to be the best at using and retaining governmental power. The most ruthless people tend to succeed at wielding coercive power, and kind-hearted people will find themselves at a disadvantage in making practical decisions on how to most effectively use the power of the state.