George Soros Agrees With Claverton?

During In an Interview on the Global Financial Crisis and investment in Energy, George Soros appears to agree with Claverton Group’s previously expressed views. In an interesting ‘Global Viewpoint’ article distributed by Tribune Media Services Inc, entitled “My Interview with George Soros: End of Financial Crisis Could Be in Sight” it seems that George has caught up with our thinking, in that he says what the markets (or government!) should be investing in is new/ alternative energy sources:

Because we face the menacing challenges of global warming and energy dependence, the next administration should direct any stimulus plan toward energy savings, developing alternative energy sources and building green infrastructure. This stimulus can be the new motor for the world economy.

This is akin to Roosevelt’s New Deal where the effects of the Great Depression were alleviated to an extent by massive investment in public works, such as the Interstate Highway system (which of course lay the foundations for the present energy crisis).  Of course the Roosevelt New Deal didn’t really solve the Depression – that had to wait for WW2 and the even more massive investment in armaments – this is line with our view (some of us anyway) that we need a WW2-style realignment of  the entire manufacturing base to mass-produce energy conservation, renewable energy, and associated devices.

Some choice quotes for the free marketeers;

George Soros: “The key to understanding this crisis — the worst since the 1930s — is to see that it was generated within the financial system itself. What we are witnessing is not the result of some exogenous shock that knocked things off balance, as the prevailing paradigm, which believes markets are self-correcting, would suggest… The reality is that financial markets are self-destabilizing; occasionally they tend toward disequilibrium, not equilibrium.

Soros:If bubbles are endemic in the system, then government regulators have to intervene to prevent bubbles from getting too big. Governments have to recognize that markets are not self-correcting. It is not enough to pick up the pieces after the crisis.

Soros: “The U.S. authorities bought into market fundamentalist ideology. They thought that the markets would ultimately correct themselves. U.S. Treasury Secretary Henry Paulson epitomized this. He thought that six months after the Bear Stearns crisis the market would have adjusted and, “Well, if Lehman (Brothers) goes bust, the system can take it.” Instead, everything fell apart.

Over to you, Tony Locke and Bruno Prior!!!

Dave Andrews

Claverton Group