The response of most Western Governments to economic crises, since the 1929 - 1931 Market debacles, has been to employ Keynesian remedies; deliberate fiscal deficits to finance a vast assortment of projects, some in themselves worthwhile, but many half-baked, conceived for no other purpose than to inflate the circulating currency. These increased expenditures by public agencies were financed, not from existing resources, but by borrowing against uncertain future prospects; drawing on wealth not yet earned in the fancy that, by so doing, they might trigger a rebound in the economy; often without having to address--or even analyze--the dynamics of the problem or problems that led to the debacle.
We have attacked such fallacies in many features--including several linked below--as aspects of Leftist/Egalitarian/Collectivist attacks on traditional societies & nations--attacks on the very continuity of heritage. Here, however, our subject will not be the fallacies, antics or contrivances, of compulsion driven sociopathic movements--or the demagogues who exploit them. Here, we offer an exposition of a better way to deal with economic & social cycles & uncertainty.
Two or three generations back, rooted Americans--whether wealthy or merely struggling to make ends meet--taught their children to emulate the squirrel, who instinctively understands the concept of prudence; of storing achieved resources against future want. This did not prevent economic upheavals. What it did do was provide a greater measure of self-reliance; of clarity as to where responsibility lay for solving the problems of individual families; while it provided previously earned capital, wealth & resources, to apply to current problems. It was this enormous resource base which, even in coming out of a "Great Depression," enabled America to turn the tide in World War II from an industrial base, built over generations, to completely overwhelm the productive capacity of Germany & Japan.
Unfortunately, the "spin doctors" of envy, resentment & dependence upon Government, have managed to focus popular attention, not on what was achieved by a dynamic people from 1781 till 1929, but on an enormous ideological & perceptual shift. In that shift, Americans, as a people, have forgotten the lessons, both of their own history and that of every other people, who have ever made a mark on the history of this world.
Provident or prudent behavior had been recognized as not only wise, but as a significant attribute of the godly, ever since the earliest Biblical times. To the Conservative reading this, it may seem redundant to even make the point; yet in an era, when even supposedly moderate people, successful in commerce, embrace some of the most foolish Keynesian deceptions, one must continuously stress what once was obvious.
That families, communities & nations, should provide for coming adversity before a crisis, is one of the most obvious of once well-understood truths. By such perspective, the thirty fold leveraging of bank wealth before the 2008 meltdown was clearly imprudent, improvident & logically indefensible. The current suggestion that a twelve fold leveraging might be rationally acceptable is only marginally less absurd.
Of course, bankers are far from the only indulgers in the fantasy that the future will take care not only of itself, but of present excess. Consider borrowers, lured into a pretense of home ownership, by signing away homes they sought to purchase with little or no deposit, to those deluded bankers; putting themselves on a financial treadmill, even to try to make the payments necessary to continue to live in those mortgaged homes. Will anyone suggest that gut-wrenching experience was really preferential to learning a better way at the knees of one's parents?
Who can defend a combination of irresponsible bankers & political "do-gooders" expanding the myth of home ownership (the real owners being the holders of mortgages, with terms impossible for the "buyers" to ever satisfy) in a make believe world where they were conferring a "benefit"--even daring to call it the "American Dream"--before bundling those irresponsible mortgages into financial packages, the actual values of which were impossible to calculate?
Not only did no group, outside the world of charlatans & demagogues, actually benefit from that multi-sided exercise in absolute irresponsibility; the game almost destroyed the major financial institutions on the American sub-continent. Can anything be clearer than that holding off on purchasing any item, until one has acquired sufficient means to pay for that item--or have fairly certain prospects of being able to meet any balance due on such purchase, without indulging in wishes or dreams--is a better way to proceed; the better way for both buyers & lenders? Is it any different for a Government engaging in expensive projects?
Spending from what one has achieved is obviously better than spending what one hopes may be achieved over an extended period. While it may be necessary to depart from this, for the sake of survival in time of War; there really is no other good exception. The reason some may doubt our point, may reflect a failure of posing "Pundits" to actually grasp the full context of what borrowing from an uncertain future actually entails. Resulting disasters may involve far more than the immediate financial losses, sustained in Market days of reckoning. Consider:
We do not suggest that most economic disasters have been consciously contrived. But in the frantic pursuit of whatever the pursuers consider immediately beneficial, inevitably at the expense of a provident building (step by step on what is already known & achieved) towards a better future, we have the equivalent of deliberate contrivance. The rationalized pursuit of an unaffordable, dream based, wish list, can be the most certain path to eventual disaster.
Commentators describe the process of borrowing from the future to deal with a perception of economic crisis, as 'kicking the can down the road.' This may show a glint of understanding, as to the dynamic context, but only a glint. The damage will always be far more serious than the metaphor implies. Take, for example, already observed consequences of two generations of increasing Federal intrusion into the, once private, health care & housing markets in America.
The explosion in health care costs & a still wheezing bubble in housing, both reflect artificial stimulation of marginal demand in those areas. To better understand the effect, you must look more closely at the micro levels of human interaction. While inflation (i.e., an increase in the supply of money) tends to act on all prices, it does not necessarily raise all prices or, with respect to the prices that do rise, raise all prices by an equivalent percentage. The price of any item reflects a confluence of factors, relating not only to supply--both present & anticipated--and demand--both present & anticipated--but also to various subjective perceptions of value. With respect to health care & housing prices, there has been a highly artificial stimulation of rising prices, directly related to the meddling of the Federal Government--not only spending money not yet earned, but doing so in a manner that fueled anticipation of yet more to come.
To better understand what happened--and how truly pernicious--look not at statistical aggregates, which can record a bubble after it is blown or after it has burst, but at what took place between individuals. The injection of the Federal Government, more deeply into American civilian health care in the 1960s, did not immediately increase the availability of health care services. Rather it enabled those favored with qualification, either by age or poverty, to suddenly "purchase" a substantially increased percentage of what was available. It clearly impacted both that market & the attitudes of those providing & using the now subsidized services. Among the many consequences was a, still continuing, spike in the cost of health care to the unsubsidized; a gradually changing attitude among physicians, who had previously expected to treat the indigent in accordance with their oaths, while paring charges to those only marginally able to pay; and a sense of increased entitlement by that sub-class of supposed beneficiaries who had never contributed anything at all towards their benefits.
But the developing social & economic disaster in "health care" has been a subject of other features. What about the housing "bubble?"
While there may be no clear cause & effect relationship between direct Federal involvement in housing, and the urban legend that home values always tend to rise (that, therefore, buying a home can be seen more as an investment than the cost of meeting one's needs); it is certain that Keynesian monetary games--by so clearly debasing the currency--were a major factor in keeping the myth alive from the end of World War II until 2008. But Federal programs to promote home ownership among those without the capital accumulations to actually purchase a home under free market conditions, had a more direct effect in contributing to social & economic disaster:
Take a couple with little or no savings--one already strapped to revolving debt at usurious interest rates, to cover previous excesses--that qualifies for a Federally guaranteed mortgage. They do not have the traditional 20% down, expected by a neighborhood building & loan, or local bank. They may not even have 5% to put down. Considering that revolving debt, they have little or no prospect for making regular payments over even a few years, much less the life of the mortgage. Yet they make the "purchase," and then "eat their guts out," trying to make what they imagined a sound "investment," actually work. The immediate effect on the general market, however, is not the real point. The sellers of the purchased home may not be in such dire straits. With the proceeds of the sale, they are able to purchase a more expensive home--whether the greater expense equates with greater value or not--and now we see the start of a "trickle up" effect, the real economics of which are somewhat obscured, both by that urban legend & the ongoing Keynesian debasement of our money.
Soon, enough a confluence of factors--even before some dysfunctional genius in the upper echelons of banking decides that it is safe to leverage assets thirty fold, starts bundling what are now described as "sub-prime" mortgages (the result of the process described in the last paragraph), in an effort to compound the idiocy--spurs a serious escalation in housing prices--the "bubble," now in the process of slowly contracting back to reality.
Clearly, what we have witnessed over the past half century, was not a better way to encourage either better health care or better access to affordable housing. The better way, in the late 20th Century & early 21st, was still the way of the squirrel; the way of the Prophet Joseph in Genesis; the way of the more provident of Mankind from the dawn of history. Building on past achievement, saving towards realistic goals; only borrowing against reasonably certain near term prospects; taking responsibility for one's needs, including the needs of one's posterity. In short, returning to a premise that each generation owes a duty to the next--a positive duty, not a rationalized pretension.
The greatest problem is that we rationalize acceptance of policies that go against all human experience, when we really do know a better way. In the process, we crush those who act wisely & further corrupt the foolish. The major effect is multi-generational.
Our Novel: The hero, a young Conservative who thinks like Donald Trump; the principal antagonist, The New York Times! [Price slashed for 2018 campaign.]>>
Return Of The Gods
Our Last Chance? [Can Trump revive the aspirational "Spirit of '76?"]
Conservative Intelligence Center
War On An American Future [More Leftist Misdirection]
Misdirection: Destructive Leftist Tactic
Leftist War On Social Continuity
Hungarian Patriots & Internationalist Betrayal Of America
"Who We Are?" (Trump Supporters)
Donald Trump--Metaphor For American Conservatism
Reality Is Not A Grievance
A Gift That Keeps On Taking
How You Define A Problem May Define You
A Lesson In Absurdity [Multi-Culturalism]
How To Respond To Anti-American Lies
Prosperity & Peace Based On Mutual Respect
Significance Of Crimea's Return To Russia
Another Variation On Demonic Theme
Variations On Demonic Theme
Short Term/Long Term: How Perspective Governs Values
Corporate Managers & "Immigration Reform"
Our Tribute To Harry Byrd Family>>
Senator Harry F. Byrd, Sr.
Compassion Or Compulsion? (Egalitarianism)
Jason Richwine & The Assault On America's Future
Agenda Serving Bullies, Crack-Pots Betraying Duty?
Implied Powers? Clear Limitations!
Missing Link To An Armed Citizenry
The Missing Link To Reality
Whither American Conservatism?
Obama Or America--Irreconcilable Differences
Losing America's Multi-Generational Purpose
Social Reform: Confusion & "Unintended Consequences?"
Cloud Dancing Revisited--A Spreading Contagion
Blame & Envy--Demagogues' Path To Power
"Diversity" In Context: Reality vs. Leftist Fantasy
World Government? Surrender By Subterfuge!
Conflicting Views On Core Premises
Pseudo Pragmatism--Political Folly
"Occupy Wall Street": Fruits Of Corrupt Education
Paths To Success & A Path To Failure.
Socialist Macro Policy Effects On Specific Groups
Debt Default In America
Egalitarian Collectivism Sabotages Human Potential
Pursuit Of "Diversity," Return To Babel?
Gold & Money In America
Freedom Of Choice? Gulliver Discovers America!
Social Security? Threats To Social Security Cont.
Social Security? The Enemy Of Social Security!
Job Creation Or Egalitarianism
Perception Of Reality--Or Lack Of It
Time--Oft Neglected Dimension In Social & Economic Analysis
A Place For The America We Knew?
Ultimate Insult--A Perspective On Egalitarianism
Cloud Dancing--Social Medium For Neurotics & Dolts
Return To Ground--America, Built On Experience & Reason
The Keynesian Harvest, 2008 & Beyond
Keynes At Harvard--Quacks In Education
Saving For A Future
Health Care--The Real Issue
Self-Destruction--A Conditioned Reflex?
Gaming The Question--Staple of Demagogues
The Better Term: "Liberal" Or "Mipip?"
"Social Justice"--Not Social & Not Just
Keynes & The Keynesian Appeal
Addiction: An Economy Dependent Upon Easy Credit
Function Of Money--A Medium Of Exchange
Congress & The Regulation Of Commerce
Conservative Debate Handbook: Access, All Chapters
Compulsion For Uniformity
How The Welfare State Works
Declaration Of Independence--With Study Guide
Conservative Resource Menu--200+ Items