As everyone knows already, there are two types of economics – Microeconomics and Macroeconomics. Microeconomics attempt to search what price is made by and what the relationships between demand curve and supply curve are and so on. The basic concept of microeconomics comes from Adam Smith’s “invisible hand of god”. It believes that any group, organization or individual should not influence on market.
However, after WWI, the world was facing a serious economic panic. During the term, any microeconomic theory was helpless for that situation. The situation did not allow economists think about what price is made by and what the relationships between demand curve and supply curve are and so on, especially, when people at the world were facing the hunger.
The situation had forced people to give a short-term influence to change economy to a positive condition to avoid economics panics caused jobless and hunger. Macroeconomics has advantages at this area. Therefore, Macroeconomics has become popular since those years.
Currently, sublime loan caused FNM and FRE problems are giving a huge negative influence to the world. Some economists even believe that sublime loan will cause an economic panic, which the world never experienced. The American government even have through their believes on “invisible hand of god” to give a financial help to FNM and FRE to avoid the two huge organizations’ bankrupt.
Sadly, macroeconomics is only useful to give a short-term influence to economy. The “short-term” usually means not longer than 2 months. However, sublime loan caused problem may not be solved in 2 months. It means market needs a control in a longer term. So far, this is the special field for socialist planned economy.
Perhaps, 2008 economic panic is an opportunity for us to look socialist planned economy again seriously to learn something, which capitalism does not have.
