Back in 2006 this blog was started with that very view in mind. So many of the really big decisions are in reality taken by politicians, they set the scene for markets. They decide taxes, they decide where airports get built, who runs the trains, who can or can't work in a Country, what currency is used.
And of course, the more wild a Country the more important politics becomes. My own investments in Iraq, Spain and other places are almost entirely governed by the political process and the outcomes achieved by the Companies there are entirely dependent on political decisions.
The world 'twas ever thus, but interestingly in a world of Quantitative analysts and algorithmic trading systems market participants moved away from the normal view - instead thinking that by the application of mathematics and science they could find a new way. Human nature prevents this, man is a political animal at heart. therefore the need to understand both qualitative and quantitative elements is key to making good decisions.
I'd love to see a quantitative analyst try and explain the creation of the euro or predict how it will end - the whole process is politically driven, with seemingly scant attention paid to the underlying economic drivers.
2012 looks indeed like politics as a whole will be king, so I'll look back at the end ofthe year to see how the balance of posts here between politics and econimics has stacked up in the course of the year.
10 comments:
and the energy sector as much as any
there are so many half-baked and wildly erratic government 'reforms' etc going on in the UK alone, I don't know how any investor - equity or steel'n'concrete capital expenditure - could be sanguine about the situation
Economics is politics incarnate.
That's why I come here.
The money is like a score of how well (or not) political policies are performing.
The modern meaning of political economy is as described
Yep. Just look how Obama and his cronies shorted BP before he want on telly and tried to bankrupt the company over Halliburton's oil spill
one more thing .. most people have no grasp of history which influences the mindset of events, let alone economic history - gove me the story over stats anyday ...
A good point CU.
50% taxation makes no economic sense at all. At the very best its a break even to 40%.
Will it be abolished soon?
No.
And Hovis' history/memory point is very valid too.
On any talk show about banker bonuses or chief exec's pay you will hear people calling for a 98% tax.
The same tax that we have already tried once before quite recently. With a noticeable lack of success.
I'm not sure this is economics - i can't see system change but it's always funny watching a shakedown. Globalized debt begins at home and hopefully english tories can just enjoy a spectator sport. The left are getting ever more extreme whilst the right are becoming pikey scum. Fingers crossed - it's econmics for every other cunt.
Politicians know that if they get off people's backs then we would have an economic transformation. They know, but they won't, because they cannot stop themselves control freaking. It's a disease, a lust for power that makes them the last people who should have so much influence.
politicians set rules
if too tight, the money-entrepeneurs-skilled labor goes somewhere else
if too loose, you get (in the extreme) corruption-might is right-unable to do business because you do not know if the other party will pay up
and my addition:
if too complicated, you just wont bother
there is more than one aspect to regulation
many say that h&s regs are rather onerous and having filled in a 6 page form about my desk-chair-pc i may agree
taking a part of a many billion debt to keep banks afloat, makes me think financial regs are both too complicated and too loose
both sets of rules are covered by political judgments
in short you are spot on
So many of the really big decisions are in reality taken by politicians
And when they're not even our politicians, then it doubles the misery.
Post a Comment