Economists sometime confine rationality and goodness.Russell Roberts at the London School of Economics.Explaining something does not justify it.
I believe that this high and increasing level of inequality is not the inevitable result of capitalism, nor is it the working out of inexorable economic forces... The high and growing inequality in the United States is a result of its policies and politics, and those that have emulated the United States—the United Kingdom, for example—are seeing similar results. The inequality is a result of the country’s ersatz capitalism—rampant with monopolies and oligopolies, government-conferred benefits on corporations and the rich, bailouts for the banks, deficiencies in corporate governance, and tax laws that allow the richest to move their money to offshore tax havens and pay far less than their fair share of taxes.From the Economist Magazine
Economies don’t fail. They do exactly what they want to do exactly when they want to do it.Bill Bonner on Market Failure.
Fed chiefs fail to improve them. Politicians fail to understand them. And everybody fails to appreciate them.
Since banking is not a business that creates real wealth, it can only enrich its owners by taking money from other people. It does that by: (1) printing money (and buying the banks’ deadbeat assets); (2) fixing interest rates at artificially low levels (taking money that should rightfully belong to savers); and (3) generally encouraging inflation to rob everyone.Bill Bonner explaining that the Fed is a vast cartel charged with making for its members and clients.
Government can have no more than two legitimate purposes: the suppression of injustice against individuals and the common defense against external invasion.William Godwin in his Enquiry Concerning Political Justice and Its Influence on Morals and Happiness.
In the second of his Two Treatises on Government, the seventeenth-century English political theorist John Locke accepted the inevitability of inequality stemming from the invention of money and private property. But having done so, he also had to acknowledge the need for a state to police the inequities that the market produces. Any state that could do this effectively, however, would also be strong enough to threaten the property holders it was meant to protect. And so a tension was born in the heart of liberalism: you can’t live with the state, since it might rob you, but you also can’t live without it, since the mob might kill you.
War is harmful, not only to the conquered but to the conqueror. Society has arisen out of the works of peace; the essence of society is peacemaking. Peace and not war is the father of all things. Only economic action has created the wealth around us; labor, not the profession of arms, brings happiness. Peace builds; war destroys.Ludwig von Mises
The fundamental assumption that both sides share is that those who have a vision of an ideal society have the right and duty to take the reins of power and history and make that vision reality through the use of political power.An anonymous blog comment highlighting the problem with political power.
Throughout our history – any country’s history – the people who save their money and invest for their future are the ones that you build an economy, a society, and a nation on.Jim Rogers on Punishing the Prudent in favor of Rescuing the Irresponsible.
In America, many people saved their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting 0% return, or virtually no return, on their savings and their investments. We’re wiping them out at the expense of people who went deeply into debt, people who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.
Augustine thought that imperial ambition was self-destructive folly. If humans had been rational, they would have created, not empires, but an enormous number of small states—Augustine says regna, literally “kingdoms”, but he means any political arrangement whatever. A multitude of tiny, harmless polities could have lived at peace among themselves and therefore at peace internally, just as a city contains innumerable households, none of which seeks to dominate the others, and all of which maybe domestically at peace.Alan Ryan in On Politics (p.175).
Scandal was common across the democratic world in the early 1960s… It wasn’t just the shadow of the war but the frustrations of the democratic peace that had made people restless by 1963. In many countries, the political class that produced the postwar settlement was still hanging on; old political soldiers were refusing to die. Governments that had been around too long were growing careless, and their publics were looking for something new. These are the circumstances in which scandal becomes a vehicle of democratic change.David Runciman on An English Affair
The press had a field day, and so did political opponents. Power-starved politicians and embittered journalists used the scandal to advance their own careers. The outs got in; the ins were temporarily put out. Its result was for ‘one network of egotists, with an intricate history of mutual obligations, murky pacts and tacit promises being replaced by an opposing alliance, no more qualified or efficient, held together by similar bargains, ambition and vanity’. There is nothing distinctively English about this. It’s how democracy works… Political damage was done by press and opposition speculation about who had said what to whom. Rumour did the work of fact. Journalists took sides; so did judges. A frustrated younger generation of politicians used the scandal to leverage old men out of power.
The result is usually disappointing: change is never commensurate with the scale of the outrage a scandal provokes. But it is effective: scandals are a good way of telling entrenched political elites when their time is up.
Democracies (especially parliamentary democracies) run on cycles of tolerance and intolerance for indiscretion at the top. New governments get away with a lot, but they are also more alert to what they can get away with. Then, when they become old, they become less alert and they get away with less.
The ability of a scandal to destroy a government usually has very little to do with the merits of the case. It depends on timing. It is asking too much to expect democracies to acquire a sense of proportion about these things.
In older monarchical systems, only a tiny elite was privileged to steal from everyone else, and if they stole too much, people would get angry and overthrow them.Jeffrey Tucker
Democracy solved the problem by granting everyone the privilege once reserved to elites. Now we can all steal from each other, and even from ourselves. This way, it is no longer clear who the enemy is. We don’t know whom to blame when things get bad. There is no one to overthrow but ourselves.
Even in the best of circumstances, the Federal Reserve Chairman is a professional price-fixer and market-rigger. The private sector manipulated prices opportunistically. The public sector rigs them on principal.James Grant, editor of Grant’s Interest Rate Observer, on Ben Bernanke's admission that he knew as early as 2008 that large banks were posting fraudulent LIBOR postings.
Economists cannot know what is ‘better.’ They can only know what is ‘more.’ They have numbers. They can count. They can add up ‘more’. As for ‘better,’ they have no idea. So, in their little minds, more is better.Bill Bonner on Too Much of a Good Thing.
That is the thinking that has driven the profession...and much of the world economy...to absurdity. Throughout the last 50 years, more looked so much like better, no one worried too much about the difference. More cars. More houses. More food. More gadgets. What was not to like?
But the cost was more debt. And by the 21st century the burden of debt had become so great that the system could no longer move forward.
By the late 20th century, economists — especially leading economists — had ceased being useful. They had become a nuisance. They closed their eyes to what an economy actually is…and to how it works…and focused on their own world — a make-believe world of numbers and theories, with little connection to the world that most people lived in. And now in the 21st century, they are up to mischief. And part of the mischief involves not noticing things that are right in front of their noses.Bill Bonner on Economists
The collapse of the Soviet Union in December of 1991 was the best news of my lifetime. The monster died. It was not just that the USSR went down. The entire mythology of revolutionary violence as the method of social regeneration, promoted since the French Revolution, went down with it.Gary North is Dancing on the Grave of the Keynesian. Every Christian should read this article.
The heart of economic growth is the availability of the means of sustenance to support the maintenance and the improvement of an economy’s infrastructure.Frank Shostak on the Economic growth and the Pool of Funding
The modern social welfare state was invented by Otto von Bismarck in the mid-19th century. The idea was simple. Governments required the consent and support of the masses. That was the lesson that Republican France had taught the world and that Bismarck had learned. You could get a lot more out of “citizens” than you could out of “subjects.” The subjects of Frederick the Great might reluctantly pay their taxes...and might join his armies. But they would always keep a distance — emotional and physical — between themselves and their masters. War and government were Frederick’s business, not theirs. Monarchs might retain the loyalty of their subjects. They could claim some of their money, too. But even the Sun King, Louis XIV, the man for whom the term “absolute monarch” was coined, was lucky if he collected 10% of the kingdom’s GDP in taxes. As for his soldiers, every one of them wanted payment. In real money.....Bill Bonner on Too Much of a Good Thing
In the course of the 19th century, monarchy was gradually replaced by some form of representative democracy or republicanism..... The main reason was probably because it is easier to squeeze and bamboozle a citizen than it is a subject. The real genius of modern democracy is that it makes the citizen feel that the government and its workings are somehow the product of his own aspirations.
