We are all a bit stupid about the economy. That is because economics really is the dismal science -- except for two groups of people: Ron Paulites, along with Andrew Jackson, the natural enemies of fiat money, and George Sorosites, ambitious malefactors of great wealth who in this age of get rich quick schemes want to get even richer quicker.
Most of the rest of us fell asleep in economics class when the talk turned to inflation, deflation and fiat money.
We thought fiats were cars.
George Soros, the sugardaddy of the left best know as a short-buyer who broke the bank of England, and Austrian economist Ludwig von Mises, were wide awake in class. So was Peter Schiff, now running for the US Senate against too long-time incumbent Chris Dodd.
Von Mises, the author of “Human Action,” still the best economic book in our fragile Western world, died with empty pockets; Soros continues to rake in the dough. He will die a rich man, his mouth stuffed with dollars rather than earth, after the last trumpet blows over him.
Schiff is the economic Cassandra who warned us all, during the last heady spendthrift days of frat boy President George Bush’s administration, that we were about to crash on the unforgiving rocks of reality.
No one paid him the least mind. And as he traveled from TV station to TV station spreading his dismal message, the rest of us shooed him away and tut tutted him unmercifully.
“Economic crash? Man, wake up. Thou art living a dream. Smell the flowers. They are all around us. The economy is – how do you put it? – SOUND in its essentials.”
But Schiff was right, as such annoying people often are.
The country was reeling like a drunken sot, from economic bubble to economic bubble; and, as happens sometimes when one has drunk life to the lees, all of us finally crashed into the brick wall.
“I told you so,” said Schiff. “Save money. Produce real goods.”
Several saviors then appeared, pointing the way to heaven on earth, among them Obama the Magnificent.
“Let me help,” said President Barack Obama and proceeded to spend even more money than George the frat boy. Angels from von Mises’ Heaven whispered in his ear, “You cannot spend your way out of a mini-depression with Chinese financing.” But he paid those angels no heed. He gave’em the brush off and lent his ear, as Shakespeare would have it, to borrowers and lenders. In fact, Obama, with a sly wink at Andy Jackson, became the chief borrower in the land; he became the chief lender-in-chief.
And now we are in a funk of deficit.
Here in Connecticut, the land of steady bad habits, things are even worse. Connecticut enjoys the distinction of being first among equals in the matter of debt; per capita, we are the most debt ridden state in the country, even beating out impecunious California. Sensing courage deprivation in our legislature, Moody has now lowered our bond rating to negative; and our state legislature, dominated by arrogant spendthrift Democrats, has pledged to do nothing about spending, until we are saved by some as yet invisible god in a bucket.
If Schiff is Cassandra, mildly but insistently pressing his message on ears clotted with wax and incomprehension, hyperinflationist true believer John Williams is Jeremiah.
The underpinnings of the American economy have so deteriorated, Williams argues, that the kind of short term irreversible economic tailspin seen in the Weimar Republic is perching on our shoulders.
In his monograph, Williams quotes Friedrich Kessler, who experienced Weimer Republic hyperinflation:
"It was horrible. Horrible! Like lightning it struck. No one was prepared. You cannot imagine the rapidity with which the whole thing happened. The shelves in the grocery stores were empty. You could buy nothing with your paper money."