Slow Motion Economic Stupidity


As Douglas Murray notes in his recent book, very few things are so very stupid as large amounts of people following a fad. Anyone who lived through the 70’s has photo albums of witch convention weddings with groups of lime green dressed groomsmen, with long straggly, ill washed locks. Today we have aging white boomers lining up to defend the rights of anyone to just lob in on us from a third world shithole. It is an odd sight to see some self-righteous middle class jerk scream in the faces of their fellow Anglos for the right to turn the place that they live into the shithole that they wouldn’t dare visit.

People will do almost anything to obtain the approval of their in-group. Looking like an absolute tool at your wedding, and spending money on wedding photos you heave in the tip is unfortunate, but mass importing people from your local piece of heaving, violent, third world rathole deserves a prison sentence (or maybe a nice long stay in the aforementioned third world funster location).

My current thoughts turn to a myth called Modern Monetary Theory and the way the managers (not leaders) who run our country are using it to kick the ‘who pays for this shit’ can down the road.

Democratic Governments, as English philosopher John Stuart Mill quipped, have a tendency to take goodies from the small number of people that earn it and shower it over the indigent many who don’t. If this was done at a household level, ie you and me, we would go broke or get divorced in a few years but governments have the capacity to run up a bigger butcher bill. By necessity we sit on the sidelines watching open mouthed at the slow-moving crash that is Western democratic governments drunk on excess cash weaving down the road to Shitsville.

There are three substantial ways governments pull the pea and thimble trick of stealing money from the productive and giving it to the ever-gaping mouths of the professional beggar class.

Borrowing for Unproductive Rubbish or Handing Debt to Your Grandkids

This is a great way for you to get yourself in debt to people you don’t like, who will then delight in asking you for money back when you least can afford to pay and will fill your country full of international carpet baggers giving you helpful hints you must obey, like cutting healthcare.

Taken at the extreme levels we are doing; it will effectively turn our governments tax arm into debt collectors for international lenders such as the Chinese or the Europeans. As it did in the Depression and as is the case in the US where about 10% of their budget makes up interest only repayments.

Huge amounts of debt make you very sensitive to changes in international interest rates and currency. Basically, if other countries think you are a dodgy debtor (which is almost anyone who has borrowed hugely) your risk rating goes up and so does your interest. If countries also reach the conclusion that you are run by morons then they tend to devalue your currency as well (given each dollar is basically a ‘share’ of the faith they have in your whole economy). Again, this makes debt even higher as it needs more of your money to pay back more of theirs.

Printing Money With No Increase in Value

If you have ever had arguments with some nut defending ‘fiat’ currencies they are almost definitely talking about turning on the printing presses to a 24 hour cycle. I once had a 12 month very entertaining troll session with one such nut by constantly pretending that an Italian car could not be compared to a currency.

In essence nuts who support this (also called Modern Monetary Theory or MMT) say that as government can enforce the value of a dollar then you can just print more and people will be richer. Of course, life doesn’t work that way and businesses can decide to just ignore government and refuse to supply unless they are given an alternative currency, like bitcoin or US dollars or barter.

As an aside many moons ago, when I was a taxi driver, this was referred to with eyes rolled as ‘the hairy chequebook’ by drivers who despaired when some drunk, vomit smelling, middle aged clubber would propose ‘back seat barter’ instead of paying for the fare back to the burbs.

The MMT take on this is that currency is just like a liquid and if people are not spending the government can just pour in the equivalent of the lack to keep the economy going. If they are just compensating for a dip in the economy, there is no net excess money and therefore no inflation.

News for the losers who print money and love Italian car currency. No one has to take your currency at the exchange rate you want mate, and if people consider you are just printing money but your economy is worth a lot less than the money you produce (noting that a dollar is effectively a share in the company that is your nation) then they will give you less in return.

Of course, it was only in the late 70’s that MMT was exploded as Tricky Dick Nixon tried to print his way out of debt for the Vietnam War and spontaneously invented stagflation, where both inflation and unemployment go up at once. Stupid people don’t know history.

Taxing People Who Won’t/Can’t Pay More

The oldie but goodie favourite of hypocritical governments often putting in place ‘temporary’ measures for the ‘good of the country’ that become very permanent, or very low initial taxes that get jacked up year on year until they are insane, like taxes on booze or getting your driver’s licence.

As governments simultaneously give tax freebies to favourite mates and boondoggle industries this tends to occur in three phases. Phase 1 – rich people start investing in boondoggles, like green energy, poor and middle class people knuckle down and cop it. Phase 2 – rich people begin investing overseas and ramp up the boondoggle avoidance, poor and middle class people go for cash jobs on the side and lose interest in working harder. Phase 3 – the rich fuck off entirely and the middle class stop turning up to work or go private and demand payment in overseas currency. There is no one to pay for healthcare and roads, let alone NDIS, indigenous welfare and all the other freebies that rent seekers consider they are entitled to.

We are at Phase 2 at present, as are many Western nations, which is also known as being at the point of the Laffer Curve. This is a phenomenon where governments who tax more actually get less tax revenue because the rich are taking their money elsewhere and the middle class are tapped out and can’t give any more. It’s something that socialists are too stupid to understand but a person who didn’t finish High School instinctively knows is obvious.

It’s worth noting that international lenders and countries have a habit of making decisions as a group after some consideration. So, there is no gradual slide down, you go from doing all right to being totally fucked in a year or two. Entertainingly, interest increases and currency devaluations tend to happen when your economy has tanked, and you can thereby least afford them, thereby accelerating your problems.

It’s like getting a divorce after you lose your job; that extra kick in the nuts you really didn’t need.

All of the above are really ways that current generations steal from future ones, and naturally those future generations will probably really hate you for it. Only losers can’t pay their bar tabs so don’t expect gentle treatment from the bouncers on your way out. Very large cuts in healthcare, pensions and social security measures nearly always result and these are targeted on the many who voted for booze they could not pay for. It’s worth a thought at the ballot box this year.