The Total Dishonesty Of Macroeconomic Theory

Download PDF Version

What is the world’s biggest lie? The world’s biggest lie is that macro economic theories provide even a remote chance of improving an economy. Despite their popularity and the enormous sums of money their proponents are payed, there is no chance any of these theories will work. They never have and they never will.

Today, right before your eyes, I am going to completely debunk the entire discipline of macro economics as it is practiced in the world today. From its beginnings with Keynes general theory all way to the theft by stimulus programs ongoing today, the whole practice is so corrupt, dishonest and destructive all involved belong in handcuffs.

All macro economic theories assume and believe in the imaginary incentive to serve. That incentive is not present in nature but it is assumed into existence.  Macro economic intervention as the discipline calls for, is built on logic far more flawed than is that of a chain letter. On paper, a chain letter appears to be a perfect business model. It is low overhead and high projected profits. With a chain letter participants are expected to behave one way but the actually behave another.

Macro economics theories make many erroneous assumptions all, on which the theories depend on. There is no way to make pleasant angel food cake when salt is used instead of sugar.  Erroneous assumptions are part of modern macroeconomic theory. Erroneous may not be the best word, because with macroeconomics the actual factors are worse than erroneous. Human behavior is exactly opposite of what it is assumed to be, just like with a chain letter.

I am only going to mention the most destructive and dishonest assumptions that go into macro economic theories.

1.) Total objectivity on the part of those implementing the plan is assumed. This is born of Keynes’s straw man concept. There is no such entity in nature. Totally objective bureaucrats don’t exist. Self interest is the only known universal incentive. What human nature guarantees is a total lack of objectivity.

2.) Government is assumed to be making economic decisions. Governments cannot make economic decisions. Governments only make political decisions.

3.) Government is assumed to be a place where problems are solved and where there are constant ongoing efforts to make life better for everyone. But, in real life government serves as a medium where people go to get what they want. Self interest is assumed to disappear when someone leaves the private sector and moves to the public sector but it doesn’t.

Yes, macro economic theory would have utility to society if human beings were statues and every one of them were completely devoid of self interest and worked tirelessly for the benefit of the country. There are many economic theories which work perfectly on paper. Communism works perfectly but it doesn’t accommodate human nature. Macro economic theories, like communism does not accommodate human nature. What does it mean, if a theory insists that people are going to act one way but in real life they are guaranteed to act another? It means the theory is useless and destructive.

I say useless but that only applies to society as a whole. Politically powerful people make huge profits by persuading government to initiate stimulus programs. Keynes’s work and that of all of the others is used to justify theft by stimulus legislation. The country as a whole winds up having its income constantly routed from the bottom of the food chain where there is little political power, to the top where there is political power in abundance.

So, do the nation’s economist really believe in what they are doing? I say they have to say they do in order to get paid. Do not think for a minute that economists who support stimulus plans on behalf of government are honest. What I explained can be understood by someone with a third grade education, and probably most who are completely illiterate. No one with all the PHDs and other credentials in the world can possible rebuke the simple logic I used to expose these flawed theories.

The public will suffer for these things as long as they are willing to believe these things.

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.Youtube Channel

Fantasy Free Economics YouTube Channel

Fantasy Free Economics recommends the following blogs.

Woodpiler Report Of Two Minds Liberty Blitzkrieg Mises Institute Straight Line Logic Paul Craig Roberts


(Visited 778 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. Bookmark the permalink.

Leave a Reply

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

Oldest Most Voted
Inline Feedbacks
View all comments
Warren J Raftshol
Warren J Raftshol
3 years ago

Adam Smith commented that the textile mills of Manchester and Birmingham operated for 100 years without bank credit via the real bills doctrine which was an internal credit system whereby retailers issued 90-day notes to pay suppliers for delivered goods. The suppliers then discounted and cashed the notes through discount houses to pay their own workers and suppliers.

The Austrian school views this credit issuance as inflationary, but I disagree because the credit is short term and self-liquidating.

Who is right?

3 years ago

…yes but someone must organize it and there in the politics start.

Chip Pickard
Chip Pickard
3 years ago

I get that but it remains that most of the newly created money was stashed as excess reserves , receiving interest from the FED and the rest went into stock buy backs, etc, inflating financial assets which generally benefit the already wealthy. This seems to be ‘baked in’ inflationary pressure when this money finally makes its way to the open market…..IOR and FF rate spreads are forcing this to happen sooner rather than later. Like Hayek says” in economic terms a high-spending statist government is indistinguishable from a dictatorship. Instead of promoting free markets, BOTH create conditions where commercial success… Read more »

Chip Pickard
Chip Pickard
3 years ago

James: I enjoy your stuff and generally agree. You lost me, in your example, how QE or new money creation leads to automatic ( in your example:: from 5% to 10%) 100% increase in profit margin. What’s the connection? Only the primary issuers/users benefit from new money as inflationary pressure generally eat up any efficiencies for those lower on the food chain. Tbanks.