Our War Time Economy

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Folks everywhere are scratching their heads asking how so many people can be worse off when economic numbers are so good? Like most questions it can be answered just by observing without insisting the answer is something else more palatable.

Despite the fact that there is no major war going on, our economy today functions like a war time economy. During the 40s, the U. S. economy was taken over by the government for the duration of the war. The official economic numbers improved dramatically over those experienced during the 30s. With a war time economy, it is understood that what is being produced in abundance is only temporary. Peoples needs are not being satisfied. Consumer needs are put on hold while the national emergency is dealt with.

The production in today’s economy is different than what would occur during a war but the effect is the same. Creating economic activity by government edict accomplishes the same thing as does a war time economy because demand does not  come by way of organic consumer spending. During a war those who prosper in business are the ones congress chooses to prosper.

The choice after the Great Recession (2008) was to enhance the value of financial assets and to allow select industries to use legislation to capture customers. The enormous sums Americans pay for healthcare is due to government edict.

What is important is that a war time economy producing economic growth, even without a war, will in the end produce the same outcome as a war time economy with a war. Failure is the end result of any command economy if it is left in tact.

There are a number of reasons why the economy took off following WWII. The big reason of course is that after Roosevelt died business investment began increasing in a normal way.

Today is different. Business is doing the opposite of investing in plant and equipment. With corporate buybacks, executives have learned that the short cut to windfall profits is to enhance the value of  the companies stock. What we will get from all of the government economic initiatives is an economic collapse. In a war time economy, government control is called off and things normalize and move forward. In today’s economy, the command portion is growing by leaps and bounds. There is not a good future to look forward to because there is no planned end to the corruption in the system.

The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

Fantasy Free Economics recommends the following blogs.
Woodpiler Report
Of Two Minds
Liberty Blitzkrieg
Mises Institute
Straight Line Logic
Paul Craig Roberts

 

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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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