Posts Tagged ‘keynes’

If you pay attention to financial media even the slightest bit, you have no doubt heard the talking heads freak out over the prospect of deflation. Bloomberg, CNBC, Fox Business, Wall Street Journal, you name it… they all mindlessly repeat the bloviations of Bernanke, Yellen, Krugman, etc. that what we need is for people to spend (not save), to borrow, and for prices to rise. All of this is wrong.

To give you a real basic econ lesson, this attitude is largely inspired by the economist John Maynard Keynes. Bernanke and company are devout Keynesians. They believe an economy is built on consumption and is stimulated by spending. Paul Krugman is outspoken in his conviction that the US does not carry enough debt. That $18 trillion is not nearly enough. He believes we need to spend much, much more and that increasing the debt does not matter in the least. I sh%t you not. These are the people running our economy. Bernanke, Yellen, Jack Lew, the financial media, republicans and democrats alike all believe we must spend our way out of this funk we’re in. And as Shaq once said, “Don’t fake the funk on a nasty dunk.” That literally means nothing, sorry.

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I always had an inkling that Wall Street was not an accurate gauge of the real economy. I didn’t know for sure and couldn’t give you any discernible theory as to why but my gut told me this was the case. Turns out I was right. I am a pretty humble dude but am also one smart mother f€cker (I’m actually not that smart at all. This is stuff a 3rd grader could understand.) and was able to able to crack the code.

There have been several instances of real legitimate growth in America since our inception (and our sexy, sexy conception). Arguably the most explosive growth we’ve enjoyed was the period starting from roughly the end of the civil war through the 1913ish. Government was relatively nonintrusive, there was no income tax, we were innovating like nobody’s biz-nass, we got electric lights up in this piece, the telephone was invented, we were laying train tracks like mad, Henry Ford invented the assembly line, and so on… (more…)