The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them “too big to fail.” Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks’ balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused by the financial crisis. Continue reading
Originally posted at Monty Pelerin’s World blog,
It is easy to be upset about what is happening all around. The economy is being destroyed, deliberately, by insane economic policies. Incentives to work are being eliminated by punishing work. At the same time rewards are increasing for not working. Not surprisingly we get less of what we penalize (work) and more of what we subsidize (non-work).
As an economist I get sick over what I see happening to what was once a great engine of productivity, capital creation and improvements in standards of living.
After two centuries of progress that amazed the world, the conditions necessary for growth and productivity are steadily being removed. Their presence allowed the miracle of America. Their absence guarantees the decline. Carried to extreme, the US could become a second or third-world nation within a few decades. Virtually all changes in the last five to ten years point in this direction and these changes are accelerating.
As pained as the economic retrogression is, the loss of freedom is even more disturbing. It was free markets and free men that made America the dominant economic power and the beacon of freedom. Without freedom, no economic policy can succeed. Yet, just as economic policies seem designed to destroy rather than create, so too does the role of government as steadily destroys freedom with its expanded oppression and power. The absence of freedom is tyranny. The absence of freedom is also poverty.
Economic decline is difficult to convey, although data are useful.
The decline of liberty, however, is not easily quantifiable and even more difficult to communicate. An email from Simon Black, expresses his concern regarding Leviathan government and its increasing oppression. It provides as good a qualitative measure of what is occurring to freedom in this country:
By now it should be clear to anyone paying attention that most of Western civilization is on a dangerous slide into tyranny.
They’re confiscating funds directly from people’s bank accounts. They’re seizing reporters’ personal records and phone logs. They’re digitally spying on everyone’s emails.
They’ve authorized military detention and drone assassination of their own citizens.
They’re using tax offices to harass political opposition groups.
They tell us what we are allowed to eat and drink, what foods we are allowed to put in our own body.
Think about it. These are Soviet tactics, plain and simple.
What’s more, they don’t even care. They think we’re all idiots who are too stupid to even notice what they’re doing.
In fact, just a few days ago, Barack Obama staunchly defended his policies, saying “you can complain about Big Brother. . . but when you actually look at the details, then I think we’ve struck the right balance.” This is textbook sociopathic behavior: destructive, antisocial conduct and a complete lack of conscience.
Unfortunately this is just the beginning.
Imagine what it will look like in a few more years: trillions of dollars of more debt… more printed currency. More police state tactics. More invasions of privacy. More ridiculous regulations.
Preparation for disaster, whether natural or man-made, should be as vital as any ideal found in the various practices of religion and spiritualism. Preparedness should be treated with reverence, discipline and duty. The drive for preparation should be seated in the very heart of humanity. As individuals and as a society, we should hold preparedness dear, for it is an expression of the desire for survival and the key to maintaining our inherent freedoms. Without self-sufficiency, we set ourselves up for endless failure and enslavement. Continue reading
US Daily Index. These indexes are designed to provide real-time information on major inflation trends, not to forecast official inflation announcements. We are constantly adding new categories of goods, but we do not cover 100% of CPI goods and services. The price of services, in particular, are not easy to find online and therefore are not included in our statistics….
…Inflation doesn’t matter. Food stamps are a sign of prosperity. Down is up. Orwell would be proud of our financial press….
The Dow has now reached a new peak. The media is prancing up and down like a giddy school girl as if this had a significant impact on the bottom line for most Americans. Don’t let the details out that many companies have increased their bottom line by squeezing wages and cutting worker benefits. Yet the mainstream press can’t even get one thing straight with inflation. The Dow is actually down 11 percent from where it was in 2000 adjusting for inflation. After all, a dollar is only worth as much as it can purchase in the economy. The US dollar has been hit over this period as well. Real household wages are back to levels last seen in the mid-1990s. So the Dow “peak” is really more symbolic and many Americans realize this. Let us take a look at where the stock market stands today through the lens of inflation.
Inflation erodes stock gains. The Dow really isn’t the best indicator of overall stock performance since it only follows a small number of companies. These are handpicked companies and the track record isn’t perfect. After all, they even had AIG and Citigroup until a few years ago. A better measure would be the S&P 500. The S&P 500 adjusting for inflation is down in real terms about 26 percent from the peak reached in 2000… via My Budget360…