There Must Be a German Word Meaning “Scary Yet Stupid”
From an interview with Marc Faber by BigGovernment’s Andrew Mellon:
However, last year Economist Gregory Mankiw articulated the position which according to Faber essentially echoes that of Fed #2 Janet Yellen and pervades much of the Fed generally, that “The problem is that people are saving money instead of spending, and we have to get the bastards spending to keep the economy going,” so the key is to inflate the money supply at something like 6% per annum.
Well that’s just brilliant — We’ll somehow create wealth by debasing wealth’s store of value.* Yellen received her PhD in economics from Yale. How can someone so smart be so stupid?
Be afraid. Be very afraid.
*The more historically literate among us already know that debasing the currency is often the last gasp of a corrupt and decadent government, in the moments before they turn everything into shit. Folks less historically literate work in Washington.
A little bit of deflation, along with honest, steady growth in GDP, helps a great deal in reducing national deficits and debts. That’s what Greece (et al) relied on for years to maintain their standards of living. It’s what we have relied on to manage our spending. But we’ve so totally blown the numbers out of the water here that we’re grasping at policies that banana republics typically rely on.
Mankiw is actually a pretty sharp cookie. But sometimes he says things that I just don’t get. Rather than recognizing that we the people are willing to attack the problem through honest austerity measures–which means tightening the belt, hitching up our pants, and getting our hands dirty cleaning up the mess (to completely abuse a metaphor)–he thinks we should devalue our work. Nice going.
I definitely get the massive difficulties related in going back to some sort of commodity-based monetary standard. But it certainly seems safer than the road we’re going down now. I don’t see any other way to put a strangle-hold on the ridiculous spending habits and monetary policies our “public servants”. Well, no other way that is bloodless.
Sounds like they;’re going the other way–inflation. Let you know your money will be worth less tomorrow so you’re more likely to spend it today.
Tim –
Of course, there’s an additional problem here, economic troubles aside. We’ve been saddled with so much debt and so much additional spending, that this economy has got to grow, and grow fast, to have a chance to pay for it all. And that means investing money wisely, not spending it in a hurry.
Oops.
One of the problems here is that the people who do the spending and grow the debt, have a way of not being around when it hits the fan. Since they do what they do in a way that ensures no one can directly drop this at their doorstep, they get to reap the benefits of this kind of fiscal policy (buying votes with other people’s money) without having to pay the consequences (which in less enlightened times involved things that could get me in trouble for even mentioning). It’s that disconnect between actions and consequences that has turned Washington into a city of irresponsible morons.
Regarding the title, you could probably get away with dummschaurig, but why not just say “Specter”?
I’m scratching my head over here. For at least a couple of decades, I’ve been hearing that Americans spend too much and save far too little. Now that they’re actually socking some dollars away, along comes some PhD to tell us the economists were just kidding? WTF?
But then -silly me- I figure the best first action would be reduce spending, hence reducing debt. Obviously I don’t belong to the Democratic Party.