Central Planning Can't Fix Herd Mentality

underground politics ^ | 3-31-08 | underground

[underground]

Central Planning and Herd Mentality

Professional politicians, investors, and journalists are working in concert to push forward new legislation to greatly expand the powers and role of the Federal Reserve. "The markets have failed" they protest, and the solution they see is more central planning. The problem is, more central planning will only re-enforce the herd mentality that created the housing bubble and the current commodities spike.

The herd theory of the markets is important to understanding how the housing bubble became such a problem, but too often the herd mentality is written off as "irrational." In this article, the New York Times almost gets it:

"As others make purchases at rising prices, more and more people will conclude that these buyers’ information about the market outweighs their own"

[underground]

Full post is on my site underground politics

(sorry about the excerpt, Google gets angry at duplicate pages) These days I feel like "socialist creep" has been replaced with a race toward outright central planning. I'm trying to stay optimistic but all my hope is in free markets, individual freedom, and independent decision making.

[Ernest_at_the_Beach]

Thanks....