the invisible hand made visible

On my way to the lab today, the usual stop at the reception to check the newspapers' headlines. The front page story being the same in all of them. The awaited rescue of some of the U.S. greatest -until very recently- banks and insurance companies by the biggest state-funded operation in history. I remembered an old post some time ago related to the "invisible hand" of the "markets", meaning their "ability" to re-adjust themselves under pressure and thought that the invisible hand was finally made visible.

It's funny isn't it? I have asked myself again and again even in past pages of this blog about economy-related stuff. Where does all the money go?, what shapes the stock market prices? and similar questions have puzzled me from time to time. It seems that despite all my questioning in older posts (and pardon the substantial self-referencing in this one), there was not much to question about. In this sense, I would urge you to NOT go back and read those previous posts because they simply talk about stuff that do not make sense anymore. It's not that things have changed, no. It's just that under the current crisis (or depression, or whatever you call it) economy cannot hide from itself any longer.

There are no invisible hands. Perhaps someone has tried to convince us about that in times of "prosperity" when everything is going as planned, because (they tell us) the markets function on their own -natural- way (that is without control). But when things really go out of control, situation gets out of hand, and banks go out of cash, then the state comes to the rescue. This -we are told- is done to save the economy, the same economy whose prime advantage was that as long as it run uncontrolled, left nothing to worry about. The new style is this. When all goes well, markets function because they are free and all the state should do is lay off private enterprise. But when the shit hits the fan the state should better put its Superman cape on and pay 700Bi to save the poor companies from going bankrupt. This translates into the following common truth: Taxpayers should get no profit from wealthy companies making money. Instead they should chip-in when the same companies are in trouble. Liberal when profitable, state-funded when problematic.

No wonder, private companies are always well-off and it's only the nationalized ones to bring all the burden.

We should not be surprised. The new dogma is like the old dogma. It has always been thus and will always be so. It's just that now it's too damn obvious not to see it.