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08/02/2005 Archived Entry: "Economic Nonsense"


How well would GPS receivers work if the system was "updated" to use Ptolemy's epicycles instead of Newtonian and relativistic physics to calculate the orbits of the GPS satellites?

Guest blogger Silver spotted a worthwhile essay on the folly of using thoroughly discredited theories to guide important decisions.

In A Consuming Folly investment strategist Sean Corrigan explores some of the more outrageous examples of these mistakes in modern political economy. Whether it is the blatant lying of Ben "helicopter money" Bernanke about the evils of the "global glut of savings" or the spewings of moronic senators who think that devaluing the dollar helps Americans, people who know better repeat errors and false theories that were debunked centuries ago.

If you've watched any coverage of hurricanes lately, you've probably heard some idiot or other opine that the destruction is "a positive for the nation's economy." .

The real wonder here is why people listen to all this poppycock. I don't buy the explanation that economics is too arcane a subject for most people to grasp. It's not that hard, and there is a lot less math than most sciences. (More logic and reasoning, but less math.) People don't understand all the intricacies of modern medicine, aerodynamics, global navigation, and countless other specialties, but there isn't the same clamor for snake oil and the repetition of old, tired, and dangerous mistakes.

What does prolong these fallacies is the fact that they are very useful to our masters. Saving money is hard and requires discipline, so politicians and their shallower constituents like to pretend that savings are bad, consumption is good, and deficits don't matter. After government has taxed and regulated an industry or the entire economy to near death, pols love to announce "stimulus packages" that are nothing more than robbing Peter to pay politically-favored Paul. The Pauls cheer and shout down the objections from the Peters.

Manipulating the value of our currency is a great way to transfer wealth without the bother and political risk of passing new taxes. Likewise deficit spending and new regulations in the name of "free trade" allow massive transfers of wealth without the benefit of debate or reckoning, ever.

Look for more of this, much more, as our government attempts to inflate its way out of paying for the massive debts is has taken on, and adds to every day. Watch for calumny against "usury," which is master-speak for forbidding the free market to set interest rates. Note how the masters are quite happy when the Chinese spend billions of dollars on US Treasury certificates, but blow a gasket when the Chinese propose to spend a month's worth of their honestly-earned dollars to buy something real, like an oil company.

I don't expect people to wake up and start laughing at economic cranks, or voting them out of office. It's so convenient to blame others for lack of thrift, declining wages, loss of purchasing power, and other perfectly predictable consequences of economic folly. But perhaps a few will begin to notice what the masters are doing behind the curtains.

Posted by Silver @ 07:29 AM CST

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