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Maybe he meant the bank where Hans Werner keeps his money?

Anyway: It is in fact the case that Hans and his ilk want to let banks go bankrupt! Think about it. Right now things are bad, but how would the situation be if we had a couple of bank runs?

by rz on Fri Oct 31st, 2014 at 11:36:25 AM EST
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Creative destruction, yay!
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 31st, 2014 at 11:38:41 AM EST
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Creative destruction is for the free market radicals what the revolution was for the communists. The mythical event where all that is wrong with the current world is wiped away and from the ashes a new better humankind rises.
by rz on Fri Oct 31st, 2014 at 11:43:28 AM EST
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Sounds like the end of WWII.

OR...

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 31st, 2014 at 12:11:23 PM EST
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Doesn't Hans Werner keep his money in the form of gold ingots under his mattress?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Oct 31st, 2014 at 11:49:13 AM EST
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Most probably.

I mean his fews on sound national investment policy is that all Germans should bring there cash to the Kanzleramt and stuff it into the mattress of Angela Merkel.

But more seriously: In read an interview with Hans Werner Sinn from 2009 where he pointed out that in fact there is no serious risk of inflation, but instead a serious risk on an Japan style deflationary trap. Yet, then he went on and advocated tirelessly for the last 5 years for policies that would push us ever deeper into exactly this trap!!

by rz on Fri Oct 31st, 2014 at 11:54:33 AM EST
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It is likely a gross abuse of Schumpeter to imply that he would advocate turning up the dial on 'creative destruction' during a banking crisis. His view would more likely be that necessary steps should be taken and that the resolution of bad banks should take place when the situation had stabilized. He was one of the major influences Perry Mehrling cited for his own development and Perry would certainly never take such a view. The problem comes when sociopathic neo-liberals seize on his work to justify more looting.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 31st, 2014 at 03:34:46 PM EST
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I only know Schumpeters Ideas from secondary sources. However, I recently found that he was cited in the German Wikipedia article on Deflationspolitik.

There it says

Joseph Schumpeter veröffentlichte im März 1929 in der Zeitschrift Der Deutsche Volkswirt einen Aufsatz, in dem er erklärte, dass sich Deutschland wegen einer angeblich zu hohen Lohnpolitik und der Sozialpolitik in einer Depression befindet, die durch eine Mischung aus Lohn- und Preissenkungen sowie Austeritätspolitik bekämpft werden sollte. Dies war exakt das Konzept der Deflationspolitik Brünings.[6] Friedrich August von Hayek empfahl damals (auch den Vereinigten Staaten) eine Deflationspolitik, um die Lohnrigidität zu brechen.

Short Translation; Joseph Schumpeter recommended a policy of slashing wages and austerity (sounds familiar?) to fight the great depression in Germany.

The article also states that the general philosophy (not necessary directly related to Schumpeter) was

Die aus der Deflation entstehende Depression sei heilsam, gerade weil ,,untüchtige" Betriebe beseitigt würden.

Translation: The Depression was a good thing, because it would crush 'unfit' companies.

Now this does not specify banks. But clearly, the concept of creative destruction was right there and it was considered to be of particular importance during a depressed economic state.

by rz on Sat Nov 1st, 2014 at 10:01:45 AM EST
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>Translation: The Depression was a good thing, because it would crush 'unfit' companies.<

Creative destruction is the core of his thinking. And in in discussions in the UK about demand stimulus to fight the great depression he ahd the same position: Nothing could be done.

by IM on Sat Nov 1st, 2014 at 10:44:00 AM EST
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If anyone is left to write the history of this period, the way that individuals who were clearly delusional at best were able to define policy will fascinate future historians.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Nov 1st, 2014 at 01:38:27 PM EST
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You may well be right. I am certainly no expert on Schumpeter.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Nov 1st, 2014 at 11:06:43 AM EST
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Schumpeter was another fool who thought the prolonged depression after The Panic of 1873 had nothing to do with hard money policies.
by rifek on Sat Nov 8th, 2014 at 09:44:46 PM EST
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