Mud Shaped Recovery

Mud Shaped Recovery PDF Version

I am on record as repeatedly saying there will be no recovery. Chances are there will be something that is called a recovery but it will be mud shaped and not a V, L or W.  So what will a mud shaped recovery look like?

The image below is to illustrate how a mud shaped recovery will look.

It will look like a splatter of mud flung up against a wall. The big splat in the middle represents the public which will be literally stuck in the mud, possibly for as long as most will live.  The finger like extrusions represent industries that are propelled outward towards the external perimeter of the mud splatter.

Economic systems get classified as capitalist, free market, socialist, communist and so on. All one need remember is that there are only two basic ways to allocate resources, by price or political power. In all command economies, resources are allocated in keeping with levels of political power.

In the United States, political power is overwhelmingly concentrated in the corporate sector. Within the corporate community, political power is concentrated in the hands of a small fraction of all corporations. Those corporations are those represented on the image that make it to the outside of the mud splatter.

The national Corona Virus response is being carried out in ways that will enhance the profitability of corporations with enormous political power. Clearly, they had virus information before anyone else and managed to have government respond in ways most helpful to them. They will prosper, unless as I forecast, there is no recovery.

There may be good jobs numbers at some point. As central planning has replaced the free market as our primary economic engine, workers real wages have not improved and many have left the workforce. There is a chance we will have more people working for less and that will be presented as good progress. The public will remain stuck in the mud.

Remember the old Jimmy Dean song, Sixteen Tons? There is a line that says, “St. Peter don’t call me cause I can’t go. I owe my soul to the company store.” Americans will be saying they owe their souls to Facebook will continue herding the population, homogenizing them and engaging in agenda driven censorship.  This practice greatly aids those in government as well as all anointed corporations. Big Pharma will continue providing the country’s citizens with the most inelastic goods and services at the highest possible prices. They will also continue using their weight to make sure no effective but inexpensive cures and remedies ever get acknowledged or publicized.

In the case of a mud shaped recovery, which is the only possible recovery, our anointed corporations will do very well. The general population will be stuck in the mud indefinitely.

Americans will be confounded as to why the economy is recovering at such a fast pace while they can’t even get their heads above water. Most are already used to that. More of the same can easily become the new new normal. At that point they won’t mind.

So, what is the solution? Well, in theory, the mindset of Americans could change. What are the chances of that happening? There is not one free market initiative going on in the world today. Conservatives in the United States call our top down socialist system capitalist while shaking their fingers at Marxist liberals.

Define people and economies any way you wish, but the United States no longer has a free market economy, not even close. Economic growth has never occurred anywhere in the world when free market forces were not abundantly present. With that being the case, only a mud shaped recovery is possible, and that type of recovery only looks good on paper.

Iconoclast Country With Curbside Jimmy and the Underdogs.

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Fantasy Free Economics recommends the following blogs.

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About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
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1 year ago

Hate to tell you, but it’s been a mud-shaped economy all my working life, and I am 65.

1 year ago

IS there any way to get notice of new articles?