Thank The Economists

There is an old joke that runs something like this: God invented economists so weather forecasters wouldn’t have to feel too badly about being wrong so often.

The joke is, however, really on all of us because so much of our lives and futures are determined by the faulty and politicized predictions of economists.

Economists have a long and dishonorable history of both bleating whatever they are paid to say and, many times due to residing in someone’s pocket, being dead wrong when issuing their sage and scholarly pronouncements.

No one should forget their cataclysmic failure to foresee the 2007 economic collapse.  Their predictions that Donald Trump’s 2016 election would lead to the next Great Depression seem, in retrospect, more like press releases produced to satisfy their political masters than reasoned analyses based on data.  It must be remembered that those who guess for a living—no matter how much academic jargon economists may use to make their predictions seem like science—have a damning tendency to guess wrong a whole lot of the time.

Today we are asked to accept two new supposed truths: Massive government borrowing and spending will heal our limping economy, and we are now facing an extended period of price inflation.  My suspicion is that we are being presented with two equally implausible predictions that are going to presage national disaster.

No individual, business, or government ever prospered in the long run by going into deep and unmanageable debt.  The explosion of federal, state, and local borrowing over the past several decades has served mainly to line the pockets of investment bankers and juice a variety of economic bubbles—housing, the stock market, the healthcare industry, and higher education prominent among many—while masking the economist-endorsed globalization agenda that has devastated our manufacturing sector and decimated worker wages.  The biggest crisis now facing the average American is the elusive affordability of life’s basic necessities.  There is a very good—and very depressing—reason that Dollar Stores and other discount chains are the fastest growing part of American retail today.

The net effect of turning America into a nation of speculators rather than builders has been an incredible—some might say obscene—concentration of wealth in the hands of a very few super wealthy individuals and families who, aided and abetted by friendly economists and easily-purchased government officials, gambled and won at a crooked game that benefited the few at the expense of the many.  Unsurprisingly, we today live in a nation of bargain shoppers who are anxiously searching for good deals on canned stew while the thin strata of the very rich on the high ground can afford to feed filet mignon to their pampered pets. 

Gigantic government borrowing and spending—on top of the previous decades of borrowing and spending that has turned America into a nation of debt slaves—benefits no one but government bureaucrats and those who live off their largesse. 

Last year’s Covid-19 protections protected America right into the poorhouse, and the incalculable damage they have caused is now being used to excuse yet more government borrowing and spending, which should depress—and anger—all Americans.  The futures of our children and grandchildren are being crushed by politicians desperate to avoid responsibility for their unbelievable overreactions and stupidity in the face of a virus that afflicted mostly those who are old and already suffering from pre-existing health problems.  However, America’s elected officials can count on economists to provide cover for their cowardice; how very fortunate they are to have academically-trained performing seals at their disposal while the average American strains to survive.

I have to guess that economists’ predictions about inflation are also going to be laughably wrong.

I don’t doubt that we will see some temporary price increases due to nature’s unreliability and man’s cupidity.  The terrible drought along the West Coast and adjoining inland states is likely to causes some rises in food and commodity prices, and the weather report for our entire planet is certainly always uncertain, which will affect global supply chains at times.  Shortsighted Biden administration policies are likely to jack up energy costs and artificially constrict the availability of many items.  International corporations and Wall Street greed heads will also disrupt industries when they see advantages to be gained by twisting the free market into a lucrative pretzel.

However, if I may make a bold prediction, I expect overall prices for many goods and services to trend downward—sometimes quite sharply—over the next several years for a very simple reason: Americans are tapped out.

Professional economists are, of course, allergic to even the idea of price deflation because the American economy that they have helped to construct over the past 75 years relies on the presumption that price inflation is a given. 

Buyers must today be convinced to overspend on houses by economists who tell them that the prices will definitely go up tomorrow.  Bond holders and banks must be assured lockstep price increases will fund the repayment of the debt they are holding.  Stock market gamblers must be led to believe that inevitable price increases will ensure endless profitability for the companies whose shares they are buying.  Sinking prices are simply impossible—economists say it is so.

America is, in short, capitalized around the need for inflation.  Were prices to reverse, it would be the functional equivalent of Armageddon for our nation because our existing financial systems could not bear the shock.

But what happens if Americans can no longer spend, spend, and spend some more?

The harsh reality of America today is that wealth is concentrated at the very top of the monetary pyramid, and this introduces tremendous fragility into the shaky financial models that economists wave like magical talismans to reassure their benefactors.  The top 1% of American households control roughly a third of U.S. wealth; the top 10% control roughly 70%; the bottom 50% control a scant 2% of total U.S. household wealth.  The insane borrowing and spending during the Covid-19 shutdowns and lockdowns did a dandy job of increasing the incomes of the richest Americans—driving up their collective wealth by over a trillion dollars in 2020 alone—but it did little to ease the enormous financial pain of most Americans.

Given that Jeff Bezos is unlikely to buy one million new cars and Bill Gates can live in only one mega-mansion at a time, the crux of the problem is clear: the lack of broad-based spending power due to the outrageous wealth inequality in America today is bound to depress both overall consumer spending and prices for goods and services over the long term.  Handing out free money does a fantastic job of jacking up the values of the stock portfolios of the wealthy, but it does not open factories, stimulate small business growth, or help the average American build a secure financial future.  Therefore, although there may be short-term price shocks due to both corporate manipulation and government interference in free market pricing, economists who are predicting inflationary pressures might be in for a rude surprise.

If prices start to drop, we can count on all manner of futile government interventions to try to stem the slide, but the laws of financial gravity will be hard to resist, which is going to negatively impact the continually shrinking American middle class.  While the super-rich might have to be content with slightly smaller yachts or fewer gold-plated commodes, those who need to put food on the table and raise their families on a budget are bound to take it on the chin—yet again.

Government has done a good job ruining the financial futures of the vast majority of Americans while lining the pockets of the wealthy few who contribute to the reelection campaigns of their favorite pet Senators and members of Congress, so it is not hard to understand why nonsensical Socialist dogma is increasingly attractive to so many frustrated and infuriated people in our nation.  If you’re getting reamed by the smug rich and their elected lackeys at every turn, any alternative system—even a demonstrably terrible one—is going to seem seductive.

The corruption and callousness of so many of our elected officials and their regulatory minions is a source of both national shame and voter disgust.  Economists dance around the reality of what ails America because it neither pleases their wealthy sponsors nor fits neatly on an Excel spreadsheet, so we are subjected to endless blather that is divorced from the actual sources of our economic pain: the greedy and duplicitous criminals in the corporate boardrooms and halls of our government.  Nonetheless, more and more voters know exactly how their financial security is being stolen right out from under them, which both terrifies and confuses those who are used to Americans willingly swallowing the official lies disseminated by the meat puppets in the mainstream media.

You don’t have to be a weatherman to know which way the wind is blowing today.  America’s levels of dissent and disobedience are high—and getting higher every day.  When government borrowing backfires and prices start to fall, you’re going to see a parade of sweating economists sent out to convince the peasantry that all is well while the ruling class is busy liquidating their assets and booking a flight for sunnier shores—hopefully in a nation without an extradition treaty with America.

In the meanwhile, I hear that artwork by Hunter Biden is a sure fire investment opportunity—which tells you all you need to know about the kleptocracy running America today. . . .

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