On the front cover of the current edition of the Economist people are given a “Bubble Warning“. If one reads the article to which the front cover refers, one is informed that the massive monetary expansion (i.e. creating money from nothing) and fiscal deficits of various governments, but particularly the United States and the United Kingdom, have artificially maintained false values in assets – in everything from shares to housing and commercial property. A vast bubble economy – an unsustainable mess that these governments have no real plan to deal with.
I admit that I read Economist articles (when I read them at all) through a deep red haze of rage – but I think I would have spotted the words “we are very sorry we gave governments such bad advice all through the current crises” and I do not remember them being there. For, of course, it was the Economist itself (along with the rest of the establishment) that pushed the policies of bailout (TARP and so on) and “stimulus” that have meant that markets have not cleared, mal-investments have not really been liquidated and the bubble economy now stares us in the face.
The economic crises of 2008 was caused by the general increase in the money supply pushed (each time they “saved the world” i.e. prevented a clear out of mal-investments, year after year) by Central Banks – particularly (but certainly not exclusively) by Alan Greenspan of the Federal Reserve. The role of the Fed in general is explained in Thomas Woods’ work “Meltdown”, and the political reasons why the increase in the money supply flowed especially into the housing market are explained in Thomas Sowell’s work “Housing: Boom and Bust”.
In 2008 is was no longer possible to avoid a terrible economic slump. That chance was lost when Greenspan (and his fellow government Central Bankers) had “saved the world” by avoiding (by increasing the money supply) the painful but needed clearing of the market and liquidation of mal-investments – which they did again and again over the years, with each time they did leaving the bubble economy worse than it was before – putting off the problem (and making it worse) not solving it. However, it was still possible in 2008 to have started out again clean – to have a short, although terrible, slump and then rebuilt the economy (such was the experience when, for example, the American government choose not to “help” in the slump of 1921 – the depression everyone forgets because, in the United States, markets were allowed to clear and real recovery allowed to happen). But with “TARP” and “quantitative easing” and all the rest of the tricks and (wildly expensive) nonsense put in place from 2008 by B.B. (if only that stood for “Bilbo Baggins”) and the governments of President Bush, President Obama and Prime Minister Gordon Brown, even that option may now be closed to us.
For the Economist to now (when it is too late) to issue a warning about government monetary and fiscal policies propping up unsustainable asset prices and prolonging (rather than ending) the bubble economy, is the hight of hypocrisy. It is like a tripping a man so that he falls off a cliff and then (as he falls) calling out “watch out”, or (as a friend just suggested to me) it is like tying weights to a man who is a lake – and then, as the man drowns, saying…
“My dear Sir – I must warn you of the danger of going swimming with lead weights chained to your legs”.
Of course some people are saying “but Paul, the Economist has repented – have you no Christian charity?”
They have not repented – they are, to use crude but honest language, just covering their own backsides. They know the present situation is “unsustainable” and they know that this information has got out to many people in the general population (for example the millions of people involved in the Tea Party movement in the United States) so the Economist writers wish to be able to pretend that they were not trying to decieve anyone by supporting bank bailouts and the like (some of the top people in the financial services industry being known as “Daddy who sent me to Oxford” to many of the Economist writers), on the contrary – they are warning us all (now it is too late to prevent the things that are to come).
How can I prove that the Economist has not repented?
Quite simply. In the very same issue of the magazine (or “newspaper” as it calls itself as a financial dodge) there is an article on Iceland. In this article the President of the country is sneered at for giving in to demands by the people of Iceland for a vote on the payments suggested by the government of Iceland to the British and Dutch governments. A payment (over a number of years) of some three billion Pounds – or ten thousand Pounds for every man, women and child in Iceland.
Under the laws of Iceland there was no pledge for the taxpayers to bailout big deposits (only quite small deposits in banks registered in Iceland… still less to pay overseas governments), this is a suggested new law, which the government of Iceland is trying to pass after the fact.
So why does the Economist sneer at the President of Iceland for allowing (or saying he is going to allow) a vote by the people – a vote demanded by at least 70% of the population of the country.
The Economist opposes allowing a vote because this will undermine the government of Iceland getting overseas government aid (yes the government of Iceland should bankrupt itself – so that it will get aid). And, even more important, allowing the people a vote on the payments to the British and Dutch governments, might (if the people dared vote “no”) undermine Iceland chances of being allowed into the loving embrace of the European Union.
In short allowing the people a vote might mean that (horror of horrors) Iceland kept its independence and did not submit to having less autonomy than it did under the Danish Crown before Second World War, or even the First World War. Total submission to the international political (and credit bubble financial) elite is the highest good to the Economist and if people (in any nation) wish to maintain some say about their own lives, they must be crushed.
Anyone still want to maintain that the Economist has repented?
I saw that cover about 20 minutes ago, Paul, and my visceral and un-muted “Fuck Me!” raised a few eyebrows around the office. I can’t bear to open the pages, frankly.
Samizdatistas. Doing the work so we don’t have to.
Anyway, two colleagues took the effort to ask why I had reacted the way I had. One expressed blank incomprension that I’d react to such an authoritative magazine as *gasp!* The Economist in such a way. The other had a light-bulb moment and reminded him that I was “an Austrian” and wouldn’t think much of the magazine.
I couldn’t really add anything to the moment, so I walked off. Now people are looking at me as though I’m Gary Glitter in a kindergarden.
You could try telling them….
“A person should not need to be an Austrian School economist to see the hypopcrisy of warning againt the consequences of the very policy you have pushed”.
As for “authoritative” – the Economist works by writing about lots of countries. A person reading it in any one of those countries knows that often gets even the most basic facts wrong about that country – but thinks it gets the facts right about all the other countries.
It “covers all the bases” as a friend of mine at the Tim Congdon I.E.A. puts it (accept he uses those words as praise).
Even the stats on the back pages are wrong.
For example, it is still reporting the Greek government deficit as about 6% of G.D.P. – long after it was admitted that it was double that.
“Oh but that was a projection by our Intelligence Unit”.
Well they were not very intelligent then – and do you not revise the numbers as new information comes to light?
A magazine (sorry “newspaper”) that does not even bother to get the numbers correct. Surely your colleagues would admit that such a publication is not very “authoritative”.
Well, I work for a hedge fund staffed by alumni of a remarkably small number of East-Coast schools.
The groupthink is strong in them.
Like the group think of the Economist of course – accept that they have a more narrow base.
Most of them come from a couple of Oxford colleges (one univeristy – and just a few bits of the university, for I doubt that Oriel college Oxford is well represented, although I could be mistaken) – or so it is said, as they do not put their names under their articles.
Of course there is only one independent University in the United Kingdom – Buckingham and that mainly concentrates on overseas students (they do not demand summer long holidays – so they get their degrees done in two years).
No doubt some establishment Economist type will now write in and say “we are not all from Oxford – some of us are from Cambridge”.
The tragic thing is that such a writer would not see the humour.
One of my favorite movie memories is of the circa 1940 film about Jessie James, starring Tyrone Power and Henry Fonda.
One of the supporting characters is the father of Jesse’s true love, who also publishes the newspaper in the town. Played by a well-known character actor whose name I can’t recall at the moment, his signature bit is the weekly editorials he dictates furiously whenever he is upset about some issue.
Each editorial starts out, “If we are ever going to have a decent life in the west, the first thing we must do is take all the (blank) out into the street and shoot them down like dogs.
Variously he applies this remedy to lawyers, railroad men, judges, and, one can assume, others who have provoked him. Surprisingly, or maybe not, he never thinks to apply this remedy to armed robbers.
At any rate, it is clear that the only sufficient remedy to the never ending cycle of boom and bust is to take all the so-called experts out into the street and, instead of shooting them, just leave them there, away from the levers of power with which they continually manipulate great swathes of our economic and social life.
If anything is painfully and abundantly clear by now, it is that these alleged experts don’t know what they’re doing, do not truly understand how the enormously complex systems of economic and social interaction really work, and have used political power to illegitimately experiment with the lives, and livlihoods, of millions of unsuspecting citizens who were foolish enough to believe their self-serving blather.
Don’t forget the Economist‘s famous Drowning in Oil cover story from 1999:
This sort of reminds of a line by the poet Walt Whitman
“Do I contradict myself? Very well, then I contradict myself, I am large, I contain multitudes.”
Publications and organizations don’t have opinions. Individuals do. To pretend otherwise is the worst sort of obfuscation and cowardice.
I find the opinions in the Economist worthless precisely because they aren’t attributed to individual writers. Everything in the Economist has to be written in the same tiresomely glib house style. Are the opinions expressed in the articles those held by individual writers? the publishers? Am I as a reader supposed to consider such questions irrelevant?
When the men and women of the ‘newspaper’ in question stop hiding behind their publications masthead and the increasingly tattered cloak of authoritativeness it provides then they might be worth arguing with.
Given the anonymity of the writers, accountability for the opinions expressed can hardly be expected.
As it is, I don’t take them seriously enough to accuse of hypocrisy.
Mark Malloch Brown was the perfect man for the Economist: a shifty, lying socialist bastard who loves putting the boot into the private sector.
I gave up my subscription to their rag eight years ago. I now can’t generally be bothered to read what they say about anything, which puts them in the same genre as the NYT, Wapo, ChiTrib, LAT, etc.
Socialist liars, the lot of them, who won’t admit the truth until they’re held at gunpoint and everyone else in the entire world has broken the story.
Having just published this front-page story, might they be susceptible to publishing a few post-scotch, cooly and carefully written, Paul Marks’ letters to the editors informing them of the rumoured superior consistency of their principle rival as a thinly veiled threat to take his custom elsewhere?
Indeed. They are pretending to repent because they know anyone who can manage a fair bit of independent thinking will have seen through the stupidity of blowing air into a burst bubble by now and see that they are just making bubbles in the glue. A sticky mess it will be.
But, of course, for them (the powers-that-be) it is not stupidity because it is all about destroying the independence of the individual (make him use your currency and then trash it) and enriching themselves in the process.
It is a simple plan to make us all slaves.
Perhaps the Icelanders will hold out? I doubt it though. Who can resist the thrall of the political and financial might of the elite?
There is only one bubble in this World and it oppresses and bleeds every freedom loving man, woman and child on Earth, the Government Bubble. While the actual citizens of the world have for the most part tried to get on with their lives these degenerate thieves and self imagined autocrats have wandered into the only sphere which could tolerate them, the, Hell, ANY government. From one nation after another, it is not the population which creates the problems, it is the incompetant toadies and beaureaucratic pygmies who would drag us all down to their infantile level.
Mike – I know you are using humour, but I will reply as if you were not (because some people may not know the background to all this).
I tried the reasoning with then method.
I wrote lots of comments to their website – pointing out (for example) that they would have a whole section on books on the current crises and simply not mention the existance of anti collectivist books.
Thomas Woods’ “Meltdown”, Thomas Sowell’;s “Housing: Boom and Bust” (in which he even managed to say nice things about the Economist), Hunter Lewis’ “Where Keynes Went Wrong” and so on and so on.
All ignored (unreviewed, not even mentioned) by the Economist – even when they sold better than the leftist books (Bush “too conservative” the Republicans should become evern more statist – sorry “moderate”) they did review. Which was just about all the time.
No comment I ever made on any article or issue ever got a response from them. No matter how many basic errors of fact I pointed out.
Indeed, even before they hid behind their “table of contents only available on subscription” wall, they started actually deleting my comments (and, no, I did not use curse words or anything like that).
You see it is not that they do not know – it is that they do know and DO NOT CARE.
The Economist writers are bad people – period.
“You see it is not that they do not know – it is that they do know and DO NOT CARE.”
Oh absolutely, I can well believe it.