This week, we’ve seen that real science…with its doubts and limitations…is easily brushed aside in favour of fake science.
‘The science’ allows people to ‘know’ things they can’t possibly know…or believe things that aren’t true…
And — much like religion before it lost favour — it’s used by the elite to bludgeon the masses and keep them in their place.
Nowhere is this more in evidence than in ‘economic science’, where, ex cathedra, smart people give themselves up to fantasies that even a child can see are nonsense.
One of those fantasies took centre stage in the news cycle this week — another bailout. It is the idea that you can help a starving man by giving him Styrofoam cookies.
The feds have no real money. All they have is fake money, which, even in the best of times, distorts crucial price signals, lowers real savings rates, reduces long-term investment, and undermines the health of the economy.
There’s never been a case in history where an economy has been helped by it.
But, heck, the Federal Reserve has more than 400 PhD economists on staff. Those guys must know what they’re doing, right?
Alas, this week, the bailout bosses flubbed their lines. The Democrats wanted more money. The Republicans wanted less.
This was bad news for the voters. If there’s anything Democrat and Republican voters can agree on, it’s this: They all want a bailout. Here’s Newsweek:
‘The vast majority of Republican and Democrat voters want a second stimulus bill to be approved by the end of this year, with millions of Americans facing unemployment and the threat of deep rent arrears.
‘A new poll from Data for Progress and Vox found that 81 percent of all voters either strongly or “somewhat” agreed that Congress needed to pass another COVID-19 relief bill before the end of the year.
‘By comparison, 11 percent of polled voters said they disagreed that a fresh stimulus bill needed to be passed in the coming weeks. A further 9 percent told pollsters they didn’t know how they felt.’
Yes, if there’s one thing that now unites left and right, blue and red, it’s that they all want more of each other’s money.
What other possible source is there? Every dollar is now in someone’s hands. If it goes to Paul, it must have come from Peter.
Which just goes to show how low the Great Republic has sunk…to the point where four out of five voters are craven mooches, ready to live at someone else’s expense.
But the quacks tell us that they have some magic…some knowledge that surpasseth human understanding…that makes it possible to conjure up wealth — out of nowhere.
‘Don’t worry about Peter,’ they say. ‘Paul neither. This money is free!’
Free money habit
Many of the feds’ giveaway programs are scheduled to come to an end at the end of the month. People will have to begin paying their rent, for example.
But they’ve gotten used to the free money. They think the feds have their backs. Like stock market investors, they expect a ‘bailout’ when it is needed. What a mess it would be if the bailouts didn’t come!
Stock prices would fall — probably by half — and not come back. And the proletariat — some of whose members are still enjoying more money from unemployment than they were getting when they were on the job — would have to go back to work fast.
This week, too, we saw what happened when the feds didn’t come to the rescue.
In the 1921 depression, they more or less let people figure it out themselves. So the US economy quickly shucked its weak businesses, its obsolete industries, and its bad investments. Within 24 months, it was thriving again.
By comparison, the feds’ rescue after the 2008–09 mortgage finance crisis boosted stock prices and made the rich richer. But manufacturing — the backbone of the working-class economy — never recovered.
And the bailouts added some $20 trillion in new debt — to households, businesses, and the government — which now makes a vigorous recovery almost impossible.
Hard at work
Over the last 11 years, those PhDs at the Fed have been hard at work. Using tools that had never been fully operational — such as quantitative easing (QE) — they were able to do more stimulating than ever before.
They quintupled the nation’s monetary foundation — the Fed balance sheet.
They took their key interest rate — which they charge member banks when they lend them money — down to zero. In real terms, it stayed there for more than a decade.
They bailed out Wall Street so well that the Dow went from a low of 6,547 in March 2009 to over 30,000 this year.
And yet, in terms of what it did for Main Street and the typical working family — measured by GDP growth — the bailout was a flop. All that stimulus produced the weakest recovery since the Second World War.
Bread and circus
What is clear to us from this experience is that ‘stimulus’ measures are a fraud. The ‘science’ behind them is quackery. The theory is preposterous. In practice, stimulus never works.
And, in the end, both Peter and Paul are going to be robbed by inflation.
But no matter…if it’s bread and circuses the people want…bread and circuses they will get. They have been trained to expect a clownish — but bountiful — government. Now, they depend on it.
If the political impasse continues, we will most likely see a panic — either on Main Street or Wall Street. Maybe both.
Then…bring out the Styrofoam cookies!
For The Rum Rebellion
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