Since 2009, the economy has been incredibly tightly managed. Either the report is bunk or the freedom of the economy is bunk, and I am primed to believe that the report is accurate. Once I get off my duff, I’ll do a little analysis to quantify what is readily apparent from the chart in Doc Lor’s post. Look at that line. Like a laser. That doesn’t happen by accident.
And now interest rates are going to go negative. Greenspan and Bernanke both don’t like it. (I think).
We already have internal capital controls which apply to ordinary citizens — you can’t move 10K without of your own damned money without being investigated. You have to fill out your indictment yourself and see if anybody acts upon it. Try moving $5K three time instead, and you;re accused of a crime — “structuring”, which means doing as you see fit with your own money.
The EUSSR has stopped production of the 500-Euro “bank note” (which euphemism means that you cannot redeem this paper for anything, ever), and they’re not alone. Now referred to as “the bin Laden banknote”, we are all supposed to get our two minutes of hate on for this terrible, terrible piece of paper. I don’t suppose that the reduction in crime attributed to getting rid of high-denomination bills (sorry, “notes”) will extend to our own government shipping pallets of cash via the USAF (“Un-Scheduled Air Freight”) to terrorist nations, but that’s okay — we only expect restriction to apply to litle people.
And when you can no longer conduct any but the most paltry business with cash, that is, when all transactions and all balances must be conducted or captured in digital form, then the government can use policy to move your money around by terrifying you — see my comment on John’s post, linked at the top of this post. You retain all the freedom in the world to manage your affairs as you see fit, responding with rationality, free will, and property rights intact, taking incentives into account and acting accordingly. It’s just that the incentives are designed to make you dump your savings into the sewer, by making it a more attractive alternative than keeping any money about you.
Want to hold cash? Physical controls are easily defeated — that’s why we have banks! Want to save cash in a bank? That will now cost you — the Fed is going to charge banks for deposit accounts, and your bank will pass the hurtings along to you!
Now what do these two previous posts and my lengthy rant have to do with each other? Here’s my interpretation:
We never recovered from the 2009 financial crisis. We weren’t supposed to. Never let a crisis go to waste.
Remember the excitement about dumping zillions of new paper dollars on the market? The expected hyper-inflation that came inevitably from such a reckless expansion of the money supply never came, despite fairly iron-clad reasons to expect it. Later, I heard a theory that I liked very much, that we were exporting the inflation to China. This may or may not have been the case, and it makes sense, but it seems either not to have been true, or one heck of a research tool to determine China’s appetite for bad money. I don’t think the world has that much appetite.
Jimmy Carter was pilloried for cancelling the B-1, and he couldn’t defend his decision on the grounds that he leapfrogged right to the remarkable and then-top-secret B-2, what with it being a secret and all. I have little nice to say about Carter but these two caveats — he did the right thing in Eagle Claw, but was let down by the JCS (which fiasco contributed to the Goldwater-Nichols shake-up of the DoD); and he did the right thing on the B-1 and B-2.
Obama and his anti-American henchmen took control of the economy through the expedient of emergency measures, and the economy remains in emergency management. There is no way, to my mind, to reconcile the ridiculous lack of variation of the last decade of GDP per capita (the chart in the Doc Lor post) with a similar set of controls over the economy (the chart in John’s post, and some of this rant) as existed prior to the crisis. The economy has been controlled remarkably well since the crisis began. Unfortunately, this is of a piece with the undeniable fairness of communism, wherein nobody has anything. So the economy is performing at a perfectly-regulated substandard rate.
Obama and his guys, like Carter, couldn’t say what they knew at the time. Remember all the talk of the new normal, and structural reasons, and so forth? Those were not predictions — those were design goals. Features, not bugs, the new anemic growth rate of per capita GDP is the price of the LightBringer.
So where is all the inflation, and how is that contributing to deflation now? If the economy is booming but nobody’s getting rich, where is all the money?
It’s being squirreled away in places the US government either cannot see, cannot control, or does not care about — yet.
Price controls do not work — this is a fact by now acknowledged by all but those communists with the most pressing need to avoid a particular fluctuation. Or those deranged by inclement weather. Or by policy makers who cannot stand to see televised humans work through the effects of their decisions without getting involved. Okay, big government loves price controls and implements them whenever it can. It’s just that in most cases, it can’t. Obama railed against “speculators” whenever fuel prices rose, oblivious of the role that speculators play as buffers, containing volatility and shielding those least able to cope from price shocks. If not for speculation, prices would fall each time a fuel truck pulled up to refill the gas station’s tanks, and would rise steadily until the next truck — or as a function of uncertainty about the next delivery.
A long chain of speculators, including you and I, are responsible for the proper functioning of the economy, and that ability is being taken from us. Price controls do not work, and the government is increasingly into the price control business — they are controlling the price of money. They are removing our ability to choose this risk or that, and are instead stampeding us out of saving, out of banks, out of cash, all into the great Wall Street casino, where the laws of economics are being brought into alignment with the laws of thermodynamics:
- In this system, you will gain nothing.
- In this system, you will save nothing.
- You are not free to go. Spin the wheel again, sucker.
We are not even sheep. We are farmed grass being fed to sheep.