Since the experiment has already been done, why do the boys in Washington now insist on repeating this experiment in economic disaster, all over again? FULL ARTICLE by Vin Suprynowicz
Source link: http://blog.mises.org/10831/extending-the-recession-indefinitely/
Extending the Recession Indefinitely
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Is it just me or has this been posted before?
Politicians always favor votes over the alternative since most if not all are insulated financially from any repercussions.
“Politicians always favor votes over the alternative”
In other words, the enemy is not the politician, the enemy is the voting public.
I despise voters much more than I despise politicians.
You all don’t get it. The purpose of our owners is to destroy the middle class by extending the recession indefinitely. Our large theoretically middle class is a freak post WW2 phenomenon and our owners don’t like it.
The popularization of the phrase, “middle class” is an invention of our owners to encourage intra-class warfare. Before WW2 80% of all Americans were working class and half of them were poor or working poor. The true “middle class” were doctors, lawyers, engineers . . . maybe 15% of the population. Back then the middle class had live-in servants and the husband worked one job and paid all the bills. Read the popular novels of the 30′s and 40′s. “Cheaper By The Dozen,” for example. The husband was time and motion study guy, a third rate engineer, and they had a live in servant.
Thanks to 20th century propaganda, the working people are now ashamed to admit it. They want to be “middle class.” How can a family that requires the wife to work full time just to pay basic expenses call itself “middle class?” Before WW2 they would be “working poor.”
Obama, the president of the AFL-CIO, and apparently MISES work to keep this “middle class” myth going. $250K a year defines the starting point of “rich?” You gots to be kidding! The guy who GROSSES $250K will be lucky to die with a house free and clear, two paid off cars, and enough cash to get himself buried.
It is a problem of scale. Keep the fight going between union members and scabs, between the guy with union wages and the guy grossing $250K, and they will forget about the guy who NETS $20 million or $250 million a year. The human brain has a problem with scale. The average guy can’t comprehend $250 million net every year.
Why do we only read of median income and never of mean income? Median family income is around $50K gross? Two adults working full time at $12.20/hour average? That’s poverty wages!
One percent of the population “earns” fifty percent of the national annual income. That makes mean annual income what? $2 million? $25 million? I can’t fathom a guess. Well, I can try.
In 2007 the GDP was $13,794,000,000,000 (13.794 trillion). The population was about 300 million. At 3 people/family, that’s 100,000,000 families. That’s about $130,000/family. If income fell on a bell curve then $250K for mean income.
If the top 1% gets around half the income, lets roughly control for our owners. 100K families splitting half the GNP is then about $125K/year is about mean income for 99% of the population. The mean income for the top 1% is then $13 trillion/ 1,000,000 families or $13,000,000/year.
billwald,
I get it: you think you know the size of the money tree, and you want its fruit handed out more equitably.
I think there is one major difference between 1929–1939 and 2008–Present, and that is that the Federal Reserve is not as restricted in credit expansion as it may have been during the 1930s. Although Rothbard does eloquently prove that the idea that the Federal Reserve sat inactive, especially between 1929–1932, is fallacious, it nevertheless stands that they did not inflate the money supply as dramatically as Ben Bernanke has (and will continue to do so).
Their inability to outstrip credit contraction, I think, is what made the 1932–33 “clearing” possible. In general, there was deflation and the market was finally able to reallocate resources. Of course, Roosevelt’s policies between 1933–39 caused economic stagnation, or at best a slow recovery, but the Federal Reserve did not (and perhaps could not) expand the money supply at the same rate that it is currently doing so (although, I am researching the topic in order to study the recession of 1937; I emailed Prof. Salerno, but have not received his suggested books through the mail yet).
So, I think, that unlike 1929–39, there will be “strong” signals of a recovery. These signals will continue to exist as long as the Federal Reserve continues to expand the money supply at an accelerating rate. There was already an August-September slump, which I think is indicative of the Federal Reserve’s slowing credit expansion, but it was responded to by Ben Bernanke declaring that the Federal Reserve would stop their open market purchases at the previously agreed figure of $300 billion.
The recession will not be indefinite. It will end when the Federal Reserve slows and stops credit expansion, or when the people lose faith in the dollar and there is hyperinflation. Unfortunately, this probably means many years of agonizing pain and frustration (and perhaps a short-term victory for Obama’s administration and Keynesian economics in general).
Unfortunately, this probably means many years of agonizing pain and frustration (and perhaps a short-term victory for Obama’s administration and Keynesian economics in general).
These lamentable effects benefit those in and connected to the state. On the left they can use these problems as the excuse to expand the welfare state. On the right they can use the same problems as the excuse to expand the police state, build up the military and then look for someone to invade as an outlet for all of the economic and political frustration. It’s hard to be an optimist right now. The only tool we have to resist this trend is education (not the public school kind).
mpolzkill,
I am more offended by the government taking away half of my poverty wage than big cats earning millions.
If I work for $12.25 an hour, I want to get to keep my full paycheck.
The fact that the government takes $5.00 away by force is what infuriates me.
Henry,
“On the right they can use the same problems as the excuse to expand the police state, build up the military and then look for someone to invade as an outlet for all of the economic and political frustration. ”
The problem with your theory is that we live in the nuclear age.
If the USA starts invading countries like Nazi germany did back in 1939, then all of a sudden all our problems will be solved permanently by Russia, China and North Korea.
Because nuclear weapons exist, we can’t start a world war like Germany did or we’ll get nuked.
Working (relatively) Poor,
Yes, it’s an abomination:
http://mises.org/etexts/rootofevil.asp
Henry,
I suppose some people tried to educate the masses back in 1929 all the way to 1939 and we all know the result.
I suppose that back in 1939 to 1945, a lot of jews tried to educate the nazis and we all know what that got them.
mpolzkill,
I might be “relatively” poor, but keep in mind that some people are absolutely rich. Bill Gates might be “relatively” poor only when compared with God.
We don’t say about them that they are “relatively” rich, we say that they are rich.
So please, when I say I’m poor, I mean it. I am absolutely poor. The “relative” thing doesn’t change a thing.
I have to go along with Jonathan on this one. I see similarities, but differences also. In the 1930′s, people still considered gold to be money. When banks began to fail, people cashed in as much paper for gold and hoarded it. They didn’t invest it. That caused a huge decline in the money stock.
Unions were much stronger then and raised wages while prices fell. That’s not happening now. Wages don’t appear to be rising and price inflation will pick up soon which will further reduce real wages.
Then there was the Smoot-Hawley tariff which destroyed international trade. Finally, FDR was on a rampage against all business and trying to turn the US into a communist satellite. Businessmen refused to invest because they feared FDR was going to nationalize everything, not just health care.
Remember, history doesn’t repeat itself, it rhymes.
Working (relatively) Poor:
Are you on a library computer or perhaps surreptitiously using your “owner’s” (boss’s) computer on his dime?
It’s quite unhealthy to look in Bill Gates’ direction as you seem to be. What do you do, what are your skills? How do you think someone with that commensurate skill level probably lived 150 years ago? That’s what I mean by “relative”.
(and again, of course you shouldn’t be robbed of 5 dollars every time you provided services to others)
Working Poor,
In the 1930s there was no internet. We have seen the amazing effect of the internet, and how the Austrian School has become far more popular during the recession than it was before. In fact, the recession may have driven more people to the Austrian School than otherwise. So, I do think that there is a chance of more widespread education, but the internet works both ways. Left wing and Statist beliefs have spread as quickly as Austrian beliefs (or more). There is no doubt that such films such as Michael Moore’s will be of great significance in regards to advancing Keynesian and socialist ideals.
In regards to finding an outlet by waging war, a world war isn’t necessary and neither is invading multiple countries. Fortunately for Obama, he already has two wars to shift public opinion. He has managed to place the blame on Bush’s shoulders and all the while maintain the same status as Bush (with no obvious signs of any intentions of leaving Afghanistan, and let alone a full withdrawal from Iraq). Terror has replaced Communism as the main outlet of public opinion.
Roosevelt did not invading multiple countries to start a world war. He simply instigated one into existence (at least in the Pacific), and then manipulated events to justify the US’ entry into the war.
Since the experiment has already been done, why do the boys in Washington now insist on repeating this experiment in economic disaster, all over again?
Because for the boys in Washington, it wasn’t a disaster at all. They used it to vastly increase the size and reach of the federal government. From their point of view it was a roaring success. Like their man Rahm said, can’t let a crisis go to waste (especially if government contrived the crisis in the first place).
Mpolzkill,
In case you haven’t noticed, this is 2009, not 1859.
Relative or not, I’m absolutely poor and Bill Gates is absolutely rich.
Why would it be insane to look at his riches in awe.
And Bill Gates himself reminds us that his riches are virtual in the form of stock holdings and should he try to sell them all at once, the stock price would fall.
So Bill Gates isn’t really worth 50 Billion and he’s more of a multi-millionnaire than a genuine billionnaire.
Still, if I earned just $50,000 a year instead of $30,000 I would feel rich, LOL !
Working (relatively) Poor:
Well, isn’t that nice?
Yes, I did notice. Did you notice the word: “ago”? That means, “gone by” or “past”. For your next lesson: “absolute”, That means “complete”.
Your ignoring the questions indicates a lot to me. So you admit that your poverty is not nearly as complete as your counterparts’ 150 years ago. By what right are you saying you deserve more than your forefathers got? (And not only more, but still more. Will you be satisfied after you get your 67% arbitrary increase?) By virtue of 150 years having passed? Because of your *feelings*?
P.S. Insane? Where’d you get that one? Unhealthy in your fashion is what I said.
If the USA starts invading countries like Nazi germany did back in 1939, then all of a sudden all our problems will be solved permanently by Russia, China and North Korea.
I think that the nuclear powers will carefully choose non-nuclear powers as the recipients of their citizens’ channeled frustrations. For example, USA and Israel pick on Iran, Russia picks on Georgia, China picks on Taiwan. UK seems to be happy building a police state to go to war with its own people and France appears to have an impending civil war with its unassimilated immigrants. India and Pakistan concentrate on a low-level border war against each other and against their minorities and/or political and religious factions. North Korea continues to play its role as a foaming but not too dangerous attack dog deliberately placed between China, Japan and USA. That’s the nuclear club in a nutshell. Everyone (in government) will be happy and as long as they step carefully there will be no real danger (to them).
But of course miscalculations can easily happen. That’s the story of WWI and WWII as I understand it. In WWII the Germans expected another climb-down by UK and France over the attack on Poland and the Japanese were probably stunned at the reaction against the Nanking massacre.
In the late Milton Friedman’s “Capitalism and Freedom”, he said that the problem in the “Great Depression” was that the Fed did not act soon enough and it did not inject sufficient capital to get credit flowing, thus prolonging the economic problems. I would like to know how Mr. Suprynowicz reconciles this with his solutions. A massive injection of money to keep credit flowing doesn’t mean bailing out failed banks, it doesn’t mean government ownership of banks.
To shift the subject a bit, one poster above was concerned that if the so-called “right” gained control it would attack other countries (presumably to take them over). Although I detest the terms “right ” and “left”, for the sake of duiscussion, I think he envisions jack-booted troops moving into other countries. But does he not understand that the term Nazi stands for the National Socialist Party? Would he attempt to convince us that German socialists were on the right, and Russian socialists (aka Communists) on the left? Or is the Chinese Communist Government both on the right and on the left simultaneously? If socialists are on both the left and right of the political spectrum, what, I wonder, does that leave in the middle? Could it possibly be those who love freedom and detest state control? If the poster is thinking in terms of Orwell’s “1984″, in which wars (real or faked) were used as distractions from the forced enslavement of the people to the State, he should see that state control in the interests of the “greater good” was the tyranny, not any particular side of any linear spectrum. As F.A. Hayek put it, there can be no freedom without security, but once the security is in place, further interference by the state, no matter how little, encroaches on the freedom the state is supposed to protect. The more control the state takes, the more freedom we lose. And as we can see today, the incumbent U.S. government is trying its best to take as much control as possible. Does that poster consider this a right wing government?
All ideological roads lead to tyranny
socialism–>tyranny
communism –> tyranny
fascism –> tryranny
fundamentalism –>tyranny
Marxism–>tyranny
left–>tyranny
right–>tyranny
FREEDOM–>PROSPERITY
I have never read Milton Friedman’s work on the “Contraction”, but I did glance through it at the bookstore once. The first thing I noticed was that the subtitle contains the dates 1929 – 1933, as if the Depression simply magically happened for no apparent reason, and thus there is no need to examine the period of time *before* the Depression. Gee, I thought science was supposed to be about determining the causes of things? And how can you know how to treat the disease, rather than just the symptons, if you don’t know the cause of the disease?
Am I missing something here? What is Friedman’s theory of how depressions/recessions happen?
Well, because the Boys did not read their History, and if they did, they interpret it differently.
Russ has it about right. Only the Austrians look at the period before the Great Depression and say “Gee, do you think maybe the Roaring 20-s had anything to do with the Great Depression?”
The Austrians know that even one “Coup de whiskey” in a monetary sense is one “Coup” too many.
http://www.lewrockwell.com/rothbard/rothbard96.html
This site and many other Austrians and their sympathizers have been predicting this current depression for a long time.
Our ‘leaders’ are going through with their “head-banging-against-the-wall” exercise because they don’t know any better.
We can sit here and “bang our heads against the wall” as we wail back and forth to each other by screaming “why are they just banging their heads against the wall?”
It’s not going to stop them from their head-banging party until their heads are sufficiently banged in.
And by then they will be so disoriented they won’t know reality from a nightmare — because, by then, our reality will be a nightmare.
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