A great headline from yesterday’s Associated Press: ‘US troops surge evacuations out of Kabul but threats persist’.
Yes, US troops are launching a major ‘reverse assault’…surging out of Afghanistan like water down a toilet drain.
But at least they tried!
In some countries, women appear on the beach — in public — with practically no clothes on. In others, such as Afghanistan under the Taliban, they cover up, head to toe.
Which one is right?
We don’t know. We only know which we like. And even as to that — seeing the state of some of the people we see on the beach — we have our doubts.
But it is not for us to tell other people what to wear. There are some things we can change for the better. And some things that are better left alone.
Today, we explore how to tell the difference.
Down the drain
And here’s a headline story from yesterday’s Washington Post…giving us advance warning: ‘House passes $3.5 trillion budget plan, aims to vote on infrastructure package by late September’.
‘House Democrats on Tuesday approved a roughly $3.5 trillion budget that could enable sweeping changes to the nation’s health-care, education and tax laws, overcoming their own internal divisions to take the next step toward enacting President Biden’s broader economic agenda.’
Yes, the same geniuses who gave us the 20-year debacle in Afghanistan are now working on US finances. And soon it will be the US economy surging down the drain.
Just as they tried to make sweeping changes south of the Hindu Kush…now, they’re aiming to make improvements south of the 49th parallel.
Will they succeed? Will the US be a more prosperous place after the improvers are finished with it?
Win-win trades win
Money doesn’t make you rich. If it were so, Zimbabwe and Venezuela would be among the richest places in the world. They’ve got plenty of money…all you could want of it.
But their money is worthless.
The US has money, too. The Federal Reserve is ‘printing’ US$120 billion in new money every month. And there’s plenty more where that came from.
But wealth comes from supplying goods and services to others — not from money.
And how do you make sure the trades are win-win? It is very simple…
People do not go into restaurants run by bad chefs. They do not buy furniture with a reputation for falling apart. They do not buy things they neither want nor need from people they don’t like or don’t trust.
So the fellow who fails to provide good products and good services at a reasonable price goes out of business.
No federal program needed!
Subsidising inefficient, unproductive businesses…
…paying people not to work…
…providing bailouts to shaky corporations…tariff protection to uncompetitive industries…‘investment’ funds to unprofitable projects…‘welfare’ to people who are believed to be unable to provide for themselves…or artificially low rates to keep the zombies alive…
…all of it makes us poorer.
But wait…isn’t there anything ‘we’ can do to make a win-win economy work better? How about long-term central planning? How about price controls…maybe only for the price of credit (interest rates)?
How about providing liquidity in a pinch…or rewarding/punishing different investments so as to direct capital where ‘we’ want it to go?
According to Marxist theory, you don’t need a free economy to produce goods and services. You can do it more intelligently, more rationally, by organising the economy according to what you’re trying to achieve.
Women and men earn different salaries? Easy-peasy…just pay them the same thing.
Too many imports from China? No sweat…close the border!
Too much advertising? Ban it.
High unemployment? Create jobs.
Poverty? Give a guaranteed income.
Inflation? Declare a moratorium on price increases.
Want people to drive less? Force them to tie their shoelaces together and hop to work.
See how easy it is?
Tried and failed
The only trouble is it doesn’t work.
Marxian economics, price controls, grand projects, and funny money have been tried many times…over many decades.
Is there one example where an economy has flourished as a result? Nope. Not a one.
More to come…
For The Rum Rebellion
PS: The Rum Rebellion is a fantastic place to start your investment journey. We talk about the big trends driving the Australian Economy. Learn all about it here.