Category Archives: Academia

“Inflation,” Properly Defined

What Is Inflation in Economics? Definition, Causes ...

The use or rather misuse of language has always been an effective tool of politicians to enact their agendas. George Orwell’s “Politics and the English Language” brilliantly showed, in his day, how language was being manipulated for all sorts of totalitarian measures:

Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful
and murder respectable, and to give an appearance of solidity to pure wind. One cannot change this all in a moment, but one can at least change one’s own habits, and from time to time one can even, if one jeers loudly enough, send some worn-out and useless phrase — some jackboot, Achilles’ heel, hotbed, melting pot, acid test, veritable inferno, or other lump of verbal refuse — into the dustbin, where it belongs.*

Since its publication in 1946, matters have only gotten worse. For example, in today’s parlance words such as “racism,” “discrimination,” “fascism” have lost all meaning and are usually used by the Left to smear its political opponents.

In the sphere of economics, examples abound of the misuse of terms and concepts all of which advance the interests of the politically-connected elites, technocrats, governments, and the banking establishment at the expense of everyone else. One of the most glaring examples which, after the financial collapse in 2020, has now become more prominent in daily life, has been the meaning of the word “inflation.”

Inflation, at one time, and properly understood meant an increase in the money supply; it did not mean an increase in prices. A rise in prices was and still is, the result of inflation.

The meaning of inflation, however, has been deftly misused by the world’s monetary lords to cover their own nefarious machinations. By deliberately changing the term it deflects the focus of their activities which can thus be blamed on others – greedy businessmen, oil cartels, workers demanding higher wages, etc.

Since central banks have complete control of the money supplies of the world, when inflation is properly understood its cause can be directly traced to them, which may lead to some inconvenient – for the banksters at least– inquires such as: “How did they attain such power and privilege?”

Redefining inflation has been done to disguise and shift focus away from the actual cause of what America and many economies of the Western world are now experiencing in the startling rise in both producer and consumer prices. This is the result of the central banks’ expansion of the money supply to mind-boggling proportions purportedly to fight the corona plandemic, but in reality it has been done to offset the financial implosion which began in late February/March of 2020 before the unnecessary and destructive lockdowns began. The lockdowns and closing of the economies gave cover for the Federal Reserve and central banks to create vast amounts of money and credit to salvage, and then re-inflate a bubble in the stock and asset markets.

An accurate account of the matter will show that the financial collapse of the system really began in the fall of 2019 as the “repo” market began to meltdown, causing the Fed to intervene with injections of “liquidity” to keep interest rates from spiking. However, just like the meaning of inflation has been corrupted, so has the narrative of the financial collapse of 2020 been purposely skewed.

As a separate discipline, economics developed in large part in reaction to British Mercantilism of the 18^th century. Economic theory was used by authors such as Adam Smith in his Wealth of Nations to debunk the system of regulations, taxes and subsidies that the British government imposed. Such economists, as did later schools of thought, most notably the Austrians, used economic thinking and its terms to expose the baneful effects of government intervention, fiat money, and the benefits of free trade.

Over time, however, most economists became corrupted and instead of acting as a check on state power, became champions of regulation, central banking, and all sorts of social engineering schemes. Economists were paid for their sell out with cushy positions and jobs in the state apparatus to manipulate language and doctrines.

Today, an inflation rate of 2% is regarded by Fed officials as good for the economy and something monetary policy should try to achieve. Previously, a rise in prices of 2% was seen for what it was – a loss of purchasing power hurting the middle and lower classes the worst while benefiting the wealthy.

For those who seek to rid economics or, for that matter, all the social sciences of deliberately misleading language and terms, George Orwell’s works are indispensable. It is, therefore, incumbent for truth seekers of all persuasions to do so not only for their own benefit, but to maintain the sage author’s legacy.

*https://libcom.org/files/Politics%20and%20the%20English%20Language%20-%20George%20Orwell.pdf

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Debt, Death, and the US Empire

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In a talk which garnered little attention, one of the Deep State’s prime operatives, National Security Advisor John Bolton, cautioned of the enormous and escalating US debt. Speaking before the Alexander Hamilton Society, Bolton warned that current US debt levels and public obligations posed an “economic threat” to the nation’s security:

It is a fact that when your national debt gets to the level ours is, that it constitutes an economic threat to the society. And that kind of threat ultimately has a national security consequence for it.*

What was most surprising about Bolton’s talk was that there has been little reaction to it from the financial press, the markets themselves, or political commentators. While the equity markets have been in the midst of a sell off, it has not been due (as of yet) to US deficits, currently in excess of $1trillion annually. Instead, the slide has been the result of fears over increase in interest rates and the continued trade tensions with China.

While Bolton’s warning about the debt is self-serving, it is accurate in the sense that the US Empire which, in part, he directs is ultimately dependent on the strength of the economy. “National security” is not threatened by a debt crisis which would mean a compromised dollar, but such an event would limit what the US could do globally. Real national security is defense of the homeland and border control – non intervention abroad.

War mongers like Bolton are fearful that a debt crisis would necessitate a decline in US power overseas. America is fast approaching what took place with the British Empire after its insane involvement in the two World Wars and its own creation of a domestic welfare state which exhausted the nation and led to the displacement of the British pound as the “world’s reserve currency.”

The US-led wars in the Middle East have been estimated by a recent Brown University study to have cost in the neighborhood of $4 trillion.** Despite this squandering of national treasure and candidate Trump calling the Iraq War a “disaster,” as president, Trump increased “defense” spending for FY 2019 to $716 billion.***

Profligate US spending and debt creation has, no doubt, been noticed by those outside of the Empire. It is probably why Russian President Vladimir Putin has been so hesitant to take any serious action against the numerous provocations that the US has taken around the globe and against Russian interests directly. The wily Putin probably figures that an implosion of US financial markets would eventually limit America’s ability to foment mayhem and havoc internationally.

The Trump Administration’s latest bellicose act, engineered by – you guessed it – John Bolton, has been the withdrawal from the intermediate-range nuclear forces treaty (INF). The treaty, signed in 1987, was a landmark achievement of the Reagan Administration which de-escalated tensions between the two super powers and kept a lid on a costly arms buildup that neither can afford.

The next financial downturn will certainly dwarf the 2008 crisis, the latter of which nearly brought down the entire financial system. The next one will be far worse and will last considerably longer since nothing has been resolved from the first crisis. The only thing that has occurred has been the creation of more debt, not only in the US, but by all Western nation states.

Under current ideological conditions, a change in US foreign policy to non-intervention is unlikely. Public opinion is decidedly pro-military after years of indoctrination and propaganda by the press, government, academia, and the media. It will take a fall in America’s economic power, specifically the loss of the dollar as the world’s reserve currency, which will ultimately bring down the empire that has neocons like John Bolton concerned.

Unfortunately, until that time, the US will continue its rampaging ways. The day of reckoning, however, appears to be fast approaching and instead of a defeat on the field of battle, the US Empire will collapse under a mountain of debt. It would be more than fitting that such a scenario should play itself out which would thus begin the very necessary retribution process that may, at least in a small sense, compensate those who have suffered and died from America’s murderous foreign policy.

*Tyler Durden, “John Bolton Warns National Debt Is An ‘Economic Threat’ To The US Security.” Zero Hedge. 01 November 2018.

**Jason Ditz, “Study: US Wars Cost $4 Trillion, Killed 259,000.” Antiwar. 29 June 2019.

Military Benefits, “2019 Defense Budget Signed byTrump.” Military Benefits. September, 2018.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Heaven Forbid Peace Should Break Out Between the US and North Korea!

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US bombing Korea

Hamhung, North Korea, June 30, 1950

As long as the US Empire can be funded and maintained on the backs of its taxpaying public, the chance of de-escalation of tensions not only on the Korean peninsula, but throughout the world are practically nil. And, as long as the nation’s current interventionist ideology holds sway, it will only be through a financial meltdown that the US’s role as global policeman will come to a much-needed end.

The most recent example of the world’s biggest bully escalating matters is its on-again, off-again badgering of North Korea. In contrast to Western/CIA media reports, the November 28 launch of what appears to be an intercontinental ballistic missile, the Hwasong-15, was not unprovoked. Instead, the North Korean test firing was in response to the unexpected announcement of further US/South Korean military drills to take place starting on December 4. The exercises are, in part, to show off the latest mass murdering “product” of America’s military industrial complex, the USF-22 Raptor stealth fighter jet.

Before the latest launch, the Kim Jong Un regime had not fired a missile for two months and was in discussions with other intermediaries about how tensions could be lessened on the Korean peninsula. For the bellicose US, however, not even an uneasy “truce” can be tolerated. The next American scheduled drill was not to take place until the spring of 2018, yet, while negotiations were taking place, the US abruptly, and to the outrage of everyone involved, renewed exercises. Russian Foreign Minister, Sergei Lavrov, explains:

We have been working with Pyongyang. Then,

all of a sudden two weeks after the United States

had sent us the signal [about readiness to dialogue],

they announced unscheduled drills in December.

there is an impression that they were deliberately

provoking [North Korean leader] Kim Jong Un to

make him break the pause and gave in to their

provocations.*

This, of course, is not the first time that the US has acted with duplicity in foreign matters. Its barbaric dealing with two Middle Eastern strongmen (Saddam Hussein, Muammar Gaddafi) are grisly examples of what happens to those who run afoul of the US Empire, especially those who do not possesses a nuclear deterrent.

North Korea, too, has witnessed the wanton destructive capabilities of the American military during the so called “police action” of the early 1950s:

The US Air Force estimated that North Korea’s

destruction was proportionally greater than that

of Japan’s in the Second World War. . . . American

planes dropped 635,000 tons of bombs on Korea . . .

including 32,557 tons of napalm, compared to

503,000 tons of bombs dropped in the entire Pacific

theatre of WWII.**

The loss of life was, to say the least, catastrophic as 10% of the population, some 3 million people, perished due mostly to American bombing while the destruction of property was equally brutal. “By the end of the war,” North Korean sources assert, “only two modern buildings remained standing in Pyongyang.”***

Is it any wonder that the North Korean leadership gets a little antsy when the US scramble its jets. It does not want a repetition of the holocaust inflicted on it by the merciless American Air Force.

Of course, these inconvenient facts are rarely if ever spoken about in the Western media, academia, and certainly not by war-mongering politicos like U.N. Ambassador Nikki Haley. They are simply ignorant of history or pretend not to know.

The US Empire only accepts peace if it favors its interests. For the Korean Peninsula that means that Kim Jong Un must disband his nuclear program. Such a move, however, would mean a premature death to Un and the eventual carpet bombing of his country. The North Korean strongman will do no such thing.

The Trump Administration may huff and puff all it wants and enact greater sanctions on the North, but unless it wants to risk a nuclear confrontation that may spread into a general world war, it has little options.

Instead of another round of destabilizing military maneuvers, maybe President Trump and his foreign policy team should try to engage in genuine negotiations to bring about an equitable solution to the matter.

Why not “give peace a chance?”

*”Russian FM Reveals First Victims in Case of War on Korean Peninsula.” Sputnik News. 2 December 2017. https://sputniknews.com/asia/201712021059640205-russia-provocations-korea-war/

**Charles K. Armstrong, “The Destruction and Reconstruction of North Korea, 1950-1960.” The Asian-Pacific Journal. http://apjjf.org/-Charles-K.-Armstrong/3460/article.html

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

The Student Loan Bubble and Economic Collapse

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The inevitable collapse of the student loan “market” and with it the takedown of many higher educational institutions will be one of the happiest and much needed events to look forward to in the coming months/years. Whether the student loan bubble bursts on its own or implodes due to a general economic collapse, does not matter as long as higher education is dealt a death blow and can no longer be a conduit of socialist and egalitarian nonsense for the inculcation of young minds.

The perilous condition of the student loan sector can be seen by looking at a few ominous pieces of data:

The US has around $1.3 trillion in non dischargeable loans to students
Over 120 billion in student loans are already in default
27% of students are a month behind on their payments*

As economic conditions deteriorate and there are even less meaningful jobs for college graduates than there are now, these numbers will only get worse.

Not only have colleges and universities been havens of leftist thought for many years, but they have become ridiculously expensive and beyond the reach of most middle-class income earners to afford without going into significant debt. Moreover, the incessant barrage by the Establishment about the necessity of a college degree has distorted the labor market to where worthless, debt-ridden degrees are pursued instead of much needed blue-collar employment. The readjustment of the labor market to a proper balance will not only take time, but it will be a costly, painful process.

While the “hard” sciences have not been as effected by the Left, the social sciences have long been an intellectual wasteland devoid of any freedom of thought or opinion. Promotion and recognition of academic excellence is, more often than not, based on diversity and one’s skin color not merit. Arguably, economic science has been the most corrupted discipline. Economics departments of major universities are now training grounds for employment in state and federal bureaucracies, the banking industry, and Federal Reserve where Marxism, Keynesianism, neo-Keynesianism or whatever kooky, nonsensical theory of the day can be put into practice.

While higher education has long been hostile to the ideals of Western Civilization, it is now explicitly a bastion of anti-white discrimination and hostility especially against white heterosexual men. Few days now pass where there is not an incident, many of which are approved by school authorities, blatantly attacking white Americans or symbols that supposedly represent them.

Of course, the higher education apparatchiks have had an easy time in their brainwashing task since the impressionable minds in their charge have been indoctrinated by twelve years of public “schooling.” Not only has the public school been a mechanism of social engineering, but it has constantly pushed its chattel to continue their “education” at the collegiate level.

The Trump Administration and most on the Right have failed to grasp the liberalistic bias of American education. Education Department Secretary Betsy DeVos has spoken about “competition” via school choice, vouchers, magnet and charter schools to increase school and student performance. The Administration’s proposed 2018 education budget calls for an increase in federal spending on school choice by $1.4 billion, a $168 million increase for charter schools, and a $1 billion increase for Title I “to encourage school districts to adopt a system of student-based budgeting and open enrollment that enables Federal, State, and local funding to follow a student to the public school of his or her choice.”**

These shopworn ideas and policies are not only fundamentally flawed and will make matters worse, but they will do nothing to counteract and or end the Left’s domination of education. Instead, President Trump should do what he spoke of at times on the campaign trail and what President Reagan promised to do, but never did – abolish the Department of Education!

While the collapse of the student loan bubble may be the catalyst for a general financial downturn and will certainly be the cause of tremendous social pain and dislocation, it will, nevertheless, be a necessary prerequisite if America and, for that matter, the Western world is to ever break the grip of leftist ideology which rules it. May the bursting of the student loan bubble commence!

*Tyler Durden, ‘”Staggering’ Student Loan Defaults On Deck: 27% Of Students Are A Month Behind On Their Payments.” Zero Hedge. 15 April 2017. http://www.zerohedge.com/news/2015-04-15/staggering-student-loan-defaults-deck-27-students-are-month-behind-their-payments

**Jade Scipioni, “Why Betsy DeVos Is Visiting This Ohio School Today.” Fox Business. 20 April 2017. http://www.foxbusiness.com/features/2017/04/20/why-betsy-devos-is-visiting-this-ohio-school-today.html

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Pope Francis and Libertarianism

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no-pope-bergoglio Don't Tread on Me

The purported pope of the Catholic Church recently attacked “libertarianism.” As a number of theologians have ably shown, Jorge Bergoglio, a.k.a Pope Francis, cannot be a legitimate pope since he was neither ordained as a priest or consecrated as a bishop in the traditional Catholic rite of Holy Orders. And, since he is not a bishop, he cannot be “bishop of Rome” – a prerequisite for being the head of the universal Church.

While “technically” he is not the pope, Bergoglio is a notorious heretic who has said a mind-boggling number of heresies, engaged in the most scandalous of actions, and has attempted to change doctrine and Church teaching. He is not the pope since a heretic is necessarily outside the Church and, thus, cannot hold ecclesiastical office, especially that of supreme pontiff.

If Bergoglio’s “invalidity” is not damnable enough, “Pope Francis” is a neo-Marxist who has repeatedly called for the redistribution of wealth, promoted mass migration, and has denigrated capitalism, accusing it of impoverishing the poor.

Naturally, with such a dossier, Bergoglio would be hostile to the concept of libertarianism. And, as a skillful demagogue, he has deliberately mischaracterized the subject.

In a message to a meeting of the Pontifical Academy of Social Sciences, Bergoglio harshly stated: “I cannot fail to speak of the grave risks associated with the invasion of the positions of libertarian individualism at high strata of culture and in school and university education.”*

If Bergoglio thinks that higher education is infected with “libertarian individualism,” he is more delusional than he has been given credit for! Academia has long been a bastion of collectivist thought. Libertarianism and, for that matter, conservative ideas have little voice in higher education. Moreover, Western culture is dominated by the ideals of social democracy, a philosophy that is anathema to libertarianism and also to real Catholicism, not the kind that is preached by imposters such as “Pope Francis!”

It is probably deliberate that Bergoglio uses the word “invasion” in his description as he subtly mocks his audience. The only invasion that has happened is not a takeover of academia by free-markets zealots, but by the millions of “asylum seekers” that have been thrust upon European soil which has been encouraged and orchestrated by the likes of multiculturalists such as Jorge Bergoglio.

“[T]he libertarian individual denies the value of the common good,” Bergoglio continues, “because on the one hand he supposes that the very idea of ‘common’ means the constriction of at least some individuals, and on the other hand that the notion of ‘good’ deprives freedom of its essence.”

Of course, to arch collectivists like “Pope Francis,” the common good always trumps individual rights. While he does not explicitly say it, the “common good” means for the good of the state, and for those who place their own self interest or that of their family before the state’s interest, they are to be ostracized or worse.

Libertarianism to Bergoglio is an “antisocial radicalization of individualism” that “leads to the conclusion that everyone has the right to extend himself as far as his abilities allow him even at the cost of the exclusion and marginalization of the more vulnerable majority.” By living “independently of others” a person can attain freedom.

Once again, as he had done throughout his “papacy” Bergoglio demonstrates that he is an economic ignoramus who does not grasp a basic tenet of social relationships.

Libertarians are proponents of the market economy and markets are the result of the division of labor, specialization, and exchange. Society, in part, is the amalgamation of numerous markets and advanced societies are ones with a highly developed division of labor. Overwhelming empirical evidence has shown that such societies are not only richer, but are more culturally advanced than self- sufficient societies (autarky) where individuals produce everything for themselves.

In such an order, an individual produces or provides services which he does best. Since he does not produce everything himself, he, therefore, depends and needs to interact with others in exchange of goods he does not produce. In the market economy, very few live “independently of others” as Bergoglio stupidly believes, but must rely and depend on their fellow man. Even entrepreneurs, who Bergoglio implicitly condemns in the above passage, have to rely on consumers to patronize their products and services or they will quickly go out of business.

Bergoglio, of course, does not understand that there are many shades of libertarianism running a wide spectrum of social, political and economic thought. If there is a common theme among libertarians, it is opposition to the modern state and the welfare/warfare system upon which it rests. The modern state will not tolerate any competition for the minds, hearts, and souls of men.

Until the Second Vatican Council (1962-65), the Church recognized that the modern state was not only its enemy, but the enemy of mankind. In this respect, the Church had common ground with the libertarian and conservative movements of the 20^th century.

The Second Vatican Council and the “reforms” which came in its wake produced an environment that has led to the likes of cretins like Jorge Bergoglio who has not only repeatedly blasphemed the Divine Founder of the institution in which he supposedly heads, but regularly spews out all sorts of discredited neo-Marxist nonsense.

While “Pope Francis” condemns libertarianism, the solution to the financial, political, and many of the social problems which confront the Western world will only be solved by “libertarian means” – a gold/silver monetary standard, political decentralization/secession, de-militarization/non-intervention, free trade, and the application of private property rights to the migration crisis.

For the good of mankind, not only should Jorge Bergoglio be ignored as supreme Roman pontiff, but he should likewise be ignored when speaking on any and all public policy matters.

*Thomas D. Williams. “Pope Warns Against ‘Invasion’ of Libertarianism.” Breitbart. 28 April 2017. http://www.breitbart.com/national-security/2017/04/28/pope-francis-warns-against-invasion-of-libertarianism/

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

It’s Still the Media, Stupid!

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The US Presidential campaign has demonstrated once again that the mainstream mass media is still the dominant force and arbitrator of political events and if it is successful in pushing the Wicked Witch of Chappaqua past the finish line this November, it may have achieved its greatest triumph. During the campaign’s stretch run, the mainstream media has used every form and variety of spin, distortion, half truth, calumny, and lies in its diabolical effort to make Killary Rotten Clinton President of the USSA.

The mass media – television, newspapers, movies, the Entertainment industry, book publishing, advertising, and now sports – is part of society’s opinion molding movers and shakers which form part of what Noble Prize winning economist F.A. Hayek called “intellectuals.” This all important group are not simply nerdy academic professors with patches on their sleeves, but are those who have the ability to shape public opinion, as Hayek describes:

It is the intellectuals in this sense who decide what views and

opinions are to reach us, which facts are important enough

to be told us, and in what form and from what angle they are

to be presented. Whether we shall ever learn of the results of the

work of the expert and the original thinker depends mainly on their

decision. *

Since at least the 1960s, the dominant opinion-molding sector of the mass media has been the electronic media, which has far outpaced newsprint and academia in influence. While its power may be on the wane in the Internet Age, it is still the most powerful and important tool in the political elites arsenal for imparting their agenda.

The electronic media, through its use of pictures and images, has been able to manipulate political outcomes and shape public policy discussions at almost every turn. As every media realist has long understood, the mainstream media has long been controlled by the Left which has used this power to counter any opposition to its narrative.

The major media outlets are controlled by five corporate giants – Time Warner, Disney, Rupert Murdoch’s News Corp., Bertelsmann of Germany, and Viacom – the largest purveyors of crony capitalism and cultural Marxism the world has ever witnessed. No dissent is allowed to be heard on these outlets nor is there any hope of career advancement for journalists or writers if the Leftist paradigm is not trumpeted.

A free society does not exist because of a free press. In fact, every society which has naively allowed a free press to exist, invariably finds that the press will seek to undermine it, especially its most innovative and successful individuals. The reason, as Hayek so brilliantly explains, is that the press, and in this age the electronic media, is part of the intelligentsia which by its nature is envy ridden since it has little to offer the world in the production of actual goods and services. Its members, therefore, are constantly denigrating their betters.

Such a mindset and sociological disposition will naturally lead members of the mass media to support politicians who will regulate, tax, and control the productive members of society. This explains, in part, their vile and hysterical opposition to Donald Trump. For Trump, unlike his crazed and corrupt opponent, has largely gained his wealth and position through his own intelligence, foresight, and hard work.

Offsetting media bias is a Herculean task and can only be done by one who is savvy and financially independent enough. This is why Donald Trump has gotten as far has he has and has used his leverage to heroically call out the manipulations of the mainstream media.

It is surprising, therefore, that Trump agreed to the Presidential “debates” in a forum orchestrated by the media with “moderators” who would be gunning to undermine him at every turn. Better to have chosen a neutral environment with an honest third party participant such as Brian Lamb of C-Span. Agreeing to the same rigged debate format was a tactical mistake.

For anyone to seriously challenge the American Leviathan, it must be understood that the mainstream media is a part of that despotic structure and it too must be neutered. Donald Trump has done more than any Presidential candidate to expose the treachery of the mainstream media, now others must take up the cause.

*F.A. Hayek, “The Intellectuals and Socialism.” https://www.mises.org/sites/default/files/Intellectuals%20and%20Socialism_4.pdf

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/

John Maynard Keynes’ “General Theory” Eighty Years Later

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Keynes Gen Theory

To the economic and political detriment of the Western world and those economies beyond which have adopted its precepts, 2016 marks the eightieth anniversary of the publication of one of, if not, the most influential economics books ever penned, John Maynard Keynes’ The General Theory of Employment, Interest and Money. Sadly, even to this day, despite its thorough refutation by lights such as Henry Hazlitt and other eminent scholars, The General Theory, which spawned “Keynesianism” and its later variants, remains supreme in academics, financial markets, and public policy.

Despite its outlandish theoretical flaws and nonsensical economic jargon and the catastrophic empirical evidence of its failure to prevent financial downturns or “stimulate” sustainable growth, Keynesianism remains the ruling paradigm of economic thought.

Why?

A number of trenchant reasons have been given for the General Theory’s continued dominance, however, one stands above all else: Keynesian economics provides the intellectual justification for economists, statisticians, technocrats, bureaucrats, and policy wonks in their exalted positions as “fine tuners” of economies the world over. Since markets are to Keynes and his disciples inherently unstable from erratic investment spending and aggregate demand, it is up to these theoreticians steeped in the knowledge of their master’s teachings to ameliorate any economic fluctuations.

The General Theory came on the scene at a propitious time during the height (or more accurately the depth) of the Great Depression, which in 1936, despite Roosevelt’s New Deal and other Western nation states’ initiatives, had not improved conditions. Keynesianism was actually a “middle way” between all out Soviet-style central planning and that of laissez-faire capitalism. Primarily through fiscal policy, the economy would be kept on an even keel under the astute management of Keynesian-trained economists. Naturally, this appealed to academics and intellectuals the world over who correctly envisioned positions of power and influence in expanded state apparatuses.

As history has shown, Keynesianism was to become more than a remedy for the Depression, but would be applicable after the crisis dissipated. The General Theory was based, in part, on the (false) notion that the capitalist system is inherently unstable and is, therefore, in need of state intervention. Keynes deliberately ignored the scholarship at the time, which demonstrated that the instability was not a “market failure,” but a monetary disorder caused by artificial credit expansion generated by the central banks, especially the Federal Reserve.

The enthusiasm for The General Theory came at first from younger economists while it was (rightly) dismissed by many of their elders as incomprehensible. Yet, its lack of clarity was appealing to the novices, since they would become the Creed’s interpreters.

Not all, however, were entirely overwhelmed by their mentor’s magnum opus as Paul Samuelson candidly admitted:

[The General Theory] is a badly written book:

poorly organized. . . . It abounds in mares’ nests

of confusions. . . . I think I am giving away no

secrets when I solemnly aver – upon the basis of

vivid personal recollection – that no one else in

Cambridge, Massachusetts, really knew what it

was all about for some twelve to eighteen months

after publication.*

Despite such an assessment, Keynesianism was never seriously challenged by its adherents, it opened too many lucrative policy making doors to be refuted.

That Keynesianism continues to reign supreme, despite its theoretical and empirical bankruptcy, speaks volumes of the state of Western intellectual and academic life. Instead of the pursuit of truth and the refutation of error, Western intelligentsia is primarily concerned with securing privilege and power for itself. At one time such status was gained by honest inquiry into social questions and issues, now it is obtained in the justification of the expansion of state power. Very few turn down such enticements!

Societies are the product of ideas. Since the release of The General Theory, the Western world has been under the destructive sway of Keynesianism, which has resulted in stagnation, financial turmoil, and eventual collapse. Until Keynes and his nutty theories have been refuted, the economic malaise will continue.

Quoted in Murray N. Rothbard, “Keynes, the Man.” In Mark Skousen, ed., Dissent on Keynes: A Critical Appraisal of Keynesian Economics. New York: Praeger Publishers, 1992, p.184

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/

Don’t Expect a Return to a Gold Standard Any Time Soon

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goldstandard

Despite trillions of paper currency units poured into the world economies since the start of the financial crisis, there has been no recovery, in fact, all legitimate indicators have shown worsening conditions except, of course, for the pocketbooks of the politically -connected financial elites. Yet, despite the utter failure of the current money and banking paradigm to resolve the situation, the chance of a return to a commodity based monetary order is highly unlikely especially when one looks at the anti-gold bias found in typical college economics textbooks.

Macroeconomics: Principles, Problems and Policies by McConnell, Brue and Flynn is a leading introductory level college text which has been through, to date, some 20 editions. Until the financial crisis of 2008, the subject of a commodity- backed money was not discussed, however, after the crisis and the popularity of gold standard enthusiasts like former Congressman and Presidential candidate Ron Paul, the authors of Macroeconomics obviously felt the need to address the resurgence in the interest of metallic money.

McConnell and company’s critique of the gold standard is full of fallacious reasoning that monetary cranks have employed for generations, all of which have been easily refuted by eminent economists. Yet, the lies and distortions about commodity money continues in academia.

The authors admit that:

To many people, the fact that the government does

not back the currency with anything tangible seems

implausible and insecure.

This logical sentiment and realization of the fraudulent nature of unbacked currency by those outside the economics profession is brushed aside by the esteemed trio:

But the decision not to back the currency with anything tangible was made for a very good reason.

Yes, and we know what that reason was: so that the state and central banksters could have a ready and unlimited access to the creation of money to solidify and expand their power. The gold standard was always an impediment to this cherished dream of the political elites – the establishment of an irredeemable, paper monetary order.

The authors, not surprisingly, see things differently:

If the government backed the currency with something

tangible like gold, then the supply of money would

vary with how much gold was available. By not backing

the currency, the government avoids this constraint and

indeed receives a key freedom – the ability to provide

as much or as little money as needed to maintain the

value of money and to best suit the economic needs of

the country.

By all means, the state and central banksters should be given as much “freedom” as possible for we all know that governments would never abuse such license and would always act in the best interests of their citizens. Certainly, the authors are not aware of any cases in history where such “freedom” was ever abused.

Nearly all today’s economists agree that managing the

money supply is more sensible than linking it to gold or

to some other commodity whose supply might change

arbitrary and capriciously. . . . if we used gold to back the

money supply so that gold was redeemable for money . . .

then a large increase in the nation’s gold stock as the

result of a new gold discovery might increase the money

supply too rapidly and thereby trigger rapid inflation. Or

a long-lasting decline in gold production might reduce the

money supply to the point where recession and

unemployment resulted.

Volumes have been written debunking such stupidity. The point, however, is that millions of minds have been exposed to such thinking and while most will not become economists (thank goodness!), what is taught in college and university classrooms about the gold standard is negative, to say the least. Moreover, those who continue in a career in finance or economics will unlikely ever be presented with an accurate assessment of the gold standard.

A return to a sound and just monetary order will only take place after the ideological groundwork has been first laid, just as fiat money and central banking came about after years of proselytizing by inflationists. It is also not enough to show the economic efficacy and moral soundness of commodity money, the ideas of crackpots like McConnell, Brue and Flynn need to be exposed for what they are.

Under the current academic environment, as generations have been misinformed, deceived, and lied to, it is unlikely that a return to a gold standard will take place. Until the intellectual battle is won, paper money and the central banksters that manage it will continue their reign of financial terror.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/