The Coming Depression, Who To Blame

A lot of the tragic unemployment and other economic stress that we have today can be traced back to the spring and summer of 2006 when the book smart genius Ben Bernanke had just taken the helm as Federal Reserve Chairman and Henry Paulson who is arguably the best salesman in the world took over as Treasury Secretary. Together these two brilliant minds engineered a scheme to drive asset prices, mostly stocks, higher. The thinking was that the resulting wealth effect would keep GDP moving higher until other economic forces took over and the economy moved ahead on its own. Of course it was also reasoned that that rising stock prices would generate enough demand in the housing market to keep that bubble from busting.
By the summer of 2008 it was becoming apparent that two years of goosing asset prices had produced a house of cards that was going to crumble regardless of what these wise guys came up with. The Bailout of 2008 was introduced as if it was a brilliant heroic plan to save the world from an accidental set of circumstances that were threatening human kind. The Bailout of 2008 was more than anything a face saving maneuver. The people, who were seen as saviors, should have been walking across our television screens in handcuffs. In terms of misallocated resources and shifted economic burdens the costs of TARP is almost unfathomable.
It seems only the most brilliant minds have the confidence to attempt to do what the rest of us accept as impossible. In my mind, plans to steer the economy forward by dismantling our free market system are always going to end with a tragedy. The public will probably never know just how badly they were screwed by the economic solutions that were introduced in 2008. It is the nature of economics that the most severe consequences of are not likely to be traced back to actual causes.

Curbside Jimmy’s Hobo Experience

(Visited 22 times, 1 visits today)
0 0 votes
Article Rating

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.
This entry was posted in Daily Comments and tagged . Bookmark the permalink.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments