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De-Linking Money from Reality
Maybe you haven’t noticed some differences in our national political and economic discussions this election season, but I certainly have.
The words and assumptions in our political debates have changed since we began the current stimulus policies just a few years ago…
And their impacts are being seen both in the US market and American society and psyche.
In a very insightful article in the Financial Times about the dire economy in Greece and the link between political connections to wealth rather than individual effort, Loretta Napoleoni points out that…
“It is the de-linking of money and reality that most damages the psyche. Money is an existential anchor.”
She is absolutely right, and the thing is, she could just as well be talking about the US.
Don’t get me wrong, federal spending has been a big problem in this country for decades; but in the last few years, deficit spending and debt levels have gone up by quantum leaps…
And deep damage to the American psyche has occurred as a result.
What do I mean by this?
Several things…
Forgetting what we used to know
The Fed’s persistent use of stimulus has not brought about financial recovery at all, really…
Its role has been that of life support for the financial system and major industrial firms...
And without it, the stock market would have stayed crashed, or maybe even dropped lower…
Major US and European banks would have failed, and many industrial firms would have sought bankruptcy protection.
But where are we today, almost 4 years later?
The reality is, without regular Fed stimulus injections, the major financial firms in the US are back to having daily near-death experiences…
The stock market craters back down to who-knows-how-low…
And profits of major US firms, lower unemployment, and other “signs” of this tepid recovery all go away.
We would see a similar result if federal spending decreased...
But the fact is, both the stimulus programs and decades of federal deficit spending have left tens of millions of Americans divorced from reality…
And have damaged the American psyche so much that many have no idea what an actual functioning economy really is or how it works.
Huge levels of federal spending on every level have changed the way many Americans—close to 50%--think about the role that government should have in the economy and in their everyday lives.
When government creates money in such extreme amounts without any visible consequences, it changes the nature of the society…
And brainwashes generations of Americans into thinking that money does not come from hard work, but rather, as much of the country now knows, money comes from voting for it.
And the message this political season is the same as it has been for decades…
Vote democratic and get your government check.
And for politicians, pander to those getting their government check and you get elected.
But how many Americans even know where that “free” money comes from?
The unfortunate answer to that question in America today is, “Who cares?”
Gone are the days of parents teaching their children the value of money and of hard work…
That basic American value has been replaced with the trite mouthing of “yes we can” and the infantile cries for “fairness” in all parts of society by those who do nothing to earn their way through life.
This is, in every sense, the “de-linking of money from reality” that Ms. Napoleoni talks about …
Too many of those who receive “government” money do so for all of their lives, and are 2nd or even 3rd generation welfare families…
The ideas planted in their brains are either that they’re not taking other people’s money…
Or that “society” owes them the money…
And that “the rich” --or those trying to be--are somehow all “cheaters” in the pursuit of the American Dream.
Why do so many Americans think that they’re entitled to money without working for it?
Because Obama--and those that came before him--have told them so, over and over, each and every day.
The idea that money must be earned is all but gone…
The notion of working hard has been devalued, corrupted, and recast in the minds of half the country as nothing but a lie…
And those that do earn a good living, are, as the Left is fond of saying, “winners in life’s lottery.”
Like the Keynesians and those further to the left, those living off the sweat of tax payers all believe that the government’s main function is not to just even the playing field, but to even the score…
Which means not only massive debt and a warped economy, but complex rules that dictate economic behavior instead of letting the market inform the economy and letting individuals decide what is in their interests.
Crowding out liberty, capitalism, and individual initiative
Not only is the Keynesian framework stifling productivity, but the idea of money itself is de-linked from reality.
Because in the Keynesian economy, money is not earned; it is simply created with a keystroke.
The distinction between money creation and wealth creation is no longer even discussed.
When government is looked to for wealth creation—which it cannot do-- it crowds out not only industry that can only survive by being profitable…
But even more devastating, Keynesian policies—which are what we have now—impose political and social ideas that are anti-capitalist in the extreme…
Keynesian ideas crowd out the ideas of capitalism, individual effort, thrift, deferred gratification, and all the values that define and support a nation’s work ethic.
This leads to political devolution; from individual-based, capitalist democracy to group politics that grab as much of the pie as possible through the ballot box.
A people that does not believe that working for a living has value or is even valid, will always vote themselves paychecks—and much and as often as they can.
That is why democracy itself cannot survive Keynesian policies...and why America’s capitalist democracy is rapidly fading from the minds of millions of Americans today.
Just listen to the election rhetoric of fairness and justice, who deserves more and who doesn’t, and who should have the power to decide such outcomes.
The effects of our current economic policies are not only toxic to real sustainable economic growth in every affected area of the economy, but are also rapidly destroying our vibrant, democratic society in the process.
And those are…The Gorrie Details.
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