The Economy is Destroyed

<img class=”alignleft wp-image-5601 size-medium” src=”×180.jpg” alt=”” width=”300″ height=”180″ />How can I declare that the economy is destroyed when official numbers look as terrific as as they do? How can I make such a bold declaration when the average economist is focused on a come and go recession if anything at all? The answer is simple. I am looking at what really matters.<!–more–>

Free markets generate an optimum in both production and living standards for the masses. Following the passage of the Full Employment Act of 1978 our free market system began dismantling and now price has been replaced by government as the primary resource allocation agent in the economy. Each day the economy is managed with central planning, the economy moves further away from the optimum output a free market system provides.

Add to that the fact that the economy is chasing the stock market rather than vice versa and any fall in stock prices is a huge drop in aggregate demand.

The economy has been driven by stimulus for decades. Stimulus moves wealth from the bottom of the food chain to the top. The purchasing power from the middle class on down has been seriously diminished. When assets of the rich decline in value, consumer demand disappears. That is the end of the recovery.

What information do I have? There is no information for me to have. Decisions are made in the present moment. Relevant information is completely sparse in the current time frame. Incentives are consistent over time. Know what incentives various groups and individuals have and what they do next is highly predictable.

When the elite of the world received basically free money what they did with it was in line with their incentive of making the most money for themselves in the shortest period of time. They did have an incentive to invest in plant and equipment but buying back stock, running the price up and unloading shares was a faster way of making money than working a business and generating profits.  This is fine as a temporary cash cow for corporate insiders. Temporary is the key word. It is temporary because the practices of central planning and stimulus in general cause the economy to rot from the bottom up. When the bottom half of the population suffers enough economic damage, the elite have destroyed their markets.

There is no way to improve on the results of a free market. There are huge profits for economists who claim there is a way. There is a huge price to be paid for believing lies.

I don’t have a lot of insight as how this dismal issue will unfold in terms of a timetable. The depression will last much longer than the initial drop in the stock market. The stock market could actually decompose in a matter of days. It has happened before. In 1929 the strong stock market had not been the cause of prosperity in the economy. In 2000 stocks were simply overpriced. In 2018 stocks made highs in response to government policy.  I do believe the depression will be worse than what the nation experienced in the 1930s. During the depression the country’s political system and public institutions had not been so compromised.

In 2008 it was clear that democratic principles were failing. The TARP bill was passed over the loud objections of constituents all over the country. Today even citizens are rejecting self government. Government operates independently of of citizen input and voting has been neutralized as a means of controlling government. What is missing today that was more present during the Great Depression is any degree of integrity or honor in elected leaders. While leaders are always guided by self interest, today’s situation is quite severe. Government operates more like a crime family than as institution that serve the public.
<a href=”″><img class=”alignleft wp-image-5236 size-medium” src=”×200.jpg” alt=”” width=”300″ height=”200″ /></a>The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

<strong>Fantasy Free Economics recommends the following blogs.</strong>

<a href=””> Of Two Minds</a> <a href=””> Liberty Blitzkrieg</a> <a href=””>Mises Institute </a> <a href=””> Straight Line Logic</a> <a href=””> Paul Craig Roberts</a>

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