The Microsoft Answer Effect

There's an article over at, never mind actually, it's a blog I read.  Where they rather smuggly point to another article showing that the Austrian School predicted the credit crunch.

In our house we call that a Microsoft support answer, from the old joke.

A helicopter gets lost in thick fog over Seattle and gets lower and lower trying to find something.  They see a building loom out of the fog and they get the attention of somebody inside.
"Where are we?", shouts the pilot.
"The third floor!" Comes the reply.
"We're over Redmond then," says the pilot.  "The answer was completely accurate but totally useless."

Lots of people saw that problems were building up in the credit and finance markets and it didn't take a trained economist to realise the problems that were being built up in the system by lending money to people who couldn't afford the loans, to extract equity from over priced homes to buy consumer goods or get more credit for things with a high depriciation rate.

Unfortunately, and here's the rub, the same Austrian School proponents were also the ones championing the fantastic ability of the financial services system to generate "weath" and the reasons it didn't need any regulation.

*sigh*

Still.  What can you do?  It's sunny in Seattle today and my dog needs walking...