Why should we, the indispensable race, be constrained by nature? Aren’t we masters of it, not subject to it? After all, if we can set the world’s interest rates and its thermostat, what can’t we do?
So many breakthroughs, advances, and improvements; we can scarcely catalogue them, much less keep up with them. Stocks are up. Consumer price inflation is going down. After falling for two years, real wages are stabilising. And the Russians are going to wave a white flag any day now.
And there’s Jake Sullivan. After advising Hillary Clinton and Barack Obama, he’s now at work for the Biden Team. Every day on the job, he makes the world a better place.
One Giant Step
Let us begin there…and look at a giant step forward for humanity. The Biden Administration has just said goodbye to the free enterprise system that was holding us back for so many years. Now, we will have un-free enterprise; surely that will be an improvement.
Like it or not, you must admit that capitalism is messy. That is its nature. It creates new wealth, but it destroys old wealth, too. You never know exactly which way it is going. But now, Sullivan tells us that he and his fellow elite apparatchiks are going to fix it. They know where they want to go. And they’re going to force US enterprises to take them there. The Wall Street Journal:
‘… laissez-faire is out, industrial policy is in. Markets allocate capital to achieve the highest return to private investors, but as Bidenomics sees it, they don’t take account of issues like climate change, fragile supply chains or geopolitical vulnerability. That is why Germany became dangerously dependent on Russian natural gas and China dominates the supply of many critical minerals and pharmaceutical ingredients.
‘To correct these market failures, Bidenomics aims to direct private capital toward favoured sectors via regulations, subsidies and other interventions. “Advocating industrial policy…was once considered embarrassing — now it should be considered something close to obvious,” Sullivan and Jennifer Harris, a colleague in both the Obama and Biden Administrations, wrote in a 2020 essay in Foreign Policy magazine.
‘Under Bidenomics…US foreign policy champions a range of economic interests, from workers’ rights to climate policy and tax compliance. Consumers and competition are not primary concerns.’
Bidenomics accepts the value of markets but sees market failure all around.
Who decides?
Let us simplify and clarify. People create wealth by providing goods and services to each other. Neither acts of Congress, agency regulations, or presidential proclamations add a penny to our prosperity.
Then, after the people have created wealth, they decide what to do with it. Or someone else decides for them. Sullivan is saying that people have failed to use their money the way he thinks they should. From now on, he says, the Feds will be the deciders.
We all know that this will make us poorer. The Feds are terrible investors. They don’t know what they are doing. And it’s not their money. Neither theory nor experience — nowhere, at no time, by nobody — provides any reason for optimism.
But money isn’t everything…and the well-meaning, pure-of-heart federales are aiming higher. They will help reduce inequality, keep the glaciers topped up, allow people to vote for the candidates the elite selects for them, and make sure their pals — deep staters, propagandists, indoctrinators, and crony capitalists — are properly rewarded.
And this is not just another sleazy power grab by the Democrats. Republicans are in on it too. The New York Times explains:
‘A rising generation of Republican politicians is more sceptical of the free market and more comfortable using government power to regulate the economy than the party has traditionally been…
‘Tomorrow afternoon, these four Republican senators — Cotton, Rubio, Vance and Young — will speak at an event on Capitol Hill that’s meant to highlight the emergence of a populist conservative movement in economics. The event is organised around a policy manifesto, called “Rebuilding American Capitalism: A Handbook for Conservative Policymakers.”
‘“We really like capitalism, but we recognise it’s not working right now,” said Oren Cass, a former aide to Mitt Romney and the executive director of American Compass, a think tank that published the manifesto.’
A rigged economy
What a bunch of jackasses. The only thing wrong with free markets in the US is that there aren’t any. They’ve been fettered with so many thousands of laws and regulations — including some 50 million pages of ‘classified’ documents — it’s amazing they work at all. That’s why small enterprises find it hard to stay in business — they can’t afford a personnel department staffed by diversity lawyers…or an accounting office full of tax experts. Mom-and-Pop operations don’t have lobbyists in Washington looking out for their interests. Nor can they borrow money at the Fed Funds rate or pay their bills by issuing more stock. Instead, they pay real wages to real workers…and deliver real goods and services to real, paying customers.
The Feds have rigged the whole economy against the productive middle class. They pushed up asset prices with fake money lent out at fake rates. They caused inflation so that now ordinary houses are so expensive that ordinary people can’t afford them. They lowered growth rates and productivity by discouraging real saving and investment. And they loaded up the federal government with US$32 trillion in debt, so that next year, the interest will take up more money than the Pentagon.
But take heart, dear reader. Happy days are here again…these same Feds, Republican as well as Democrat, are no longer even pretending that US enterprises should be free.
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
