Discover more from Peter St Onge, Ph.D.
Our "Leaders" have one skill: Breaking Things and Lying about it
While governments are not famous for honesty, these past few years have been a masterclass in economic gaslighting, a gorey parade of economic lies.
On inflation, first it was transitory. Then it got a downgrade to temporary. Finally, with inflation hitting 8.9% last year, Powell gave up, admitting with a sheepish grin during Congressional testimony that “We now understand better how little we understand about inflation.”
Of course, you might then ask why the Fed “manages” inflation if it doesn’t understand it.
Next, the gaslights moved on to the economy. First Biden told us it was “strong as hell,” then the downgrade to a possibility of a slowdown. That, too, became "a path to a soft landing" by Powell.
Now? Recently Chicago Fed President Austin Goolsbee -- a former chair of the CEA, the top economics post in the administration -- said "we are trying to figure out where we are in this business cycle."
So, for those following along at home, they don’t understand inflation, and they're trying to figure out the economy.
In fact, so far we’ve gotten a 2008-style bank collapse combined with 1970’s inflation now turning to 1970's stagflatinon, all combined with levels of debt we haven't seen in almost a century. If that's a "soft landing" If that's soft I'd be terrified what's hard -- a meteor strike? Nuclear war?
Then there's good old Janet Yellen. Even after the banks started falling like dominos, Janet Yellen reassured Americans that "the US banking system remains sound." In fact, she said this *while* she and Jay Powell were standing up literally trillions of dollars in bailouts -- the biggest bank bailout in history -- that failed to stop bank runs that now proceed on a schedule with each quarterly earnings report.
Finally, just the other day, Yellen pulled the master rug-pull: after spending months denying de-dollarization is even happening, she casually mentioned in Congressional testimony that not only is de-dollarization happening, it's "only natural" that it continue.
Half the time our leaders don't understand what they're breaking. The other half they do understand but are lying. Then, when the bad thing happens, it's either sheepish grins how little they understand or it's "only natural."
The problem is every time they lie millions of people believe them. I mean, you and I don't believe them, but most Americans are still bamboozled by the jargon, the Ph.D's, the almost religious trappings of the Federal Reserve.
In fact, even the so-called experts believe them: The entire US banking system, for example, walked into a trap set by the Fed reassuring them inflation was transitory and any rate hikes would be calm and measured -- "normalization" was the word of the day, all very calm and gradual.
In fact, the Fed delivered the most savage rate hikes in 50 years, gutting banks and sending them to the gallows. In the immortal words of Otter, "You screwed up. You trusted us."
Normal Americans, of course, did even worse: Had they been warned that banks could collapse, had they been warned the jobs would dry up, they could have prepared. Instead, they get lies until it breaks, then "it was only natural."
So the lies aren't just about bureaucrats covering their incompetent rears. They are actively breaking people.
Why Do They Lie?
The key is to understand that policymakers know they are lying. Literally: The Fed calls it "Forward guidance" and it's a key part of the Keynesian fanstasy where the people can be deceived to defy economic reality. Making economic failures into psychological phenomena, to be combatted with yet more psyops. Recessions become "animal spirits" -- a kind of mass delusion -- to be fought with yet more delusion. Inflation, likewise, is mass hypnosis that must be countered with yet more hypnosis — “inflationary expectations.”
Repeat a lie enough times and it becomes true.
This means in their minds they can do anything -- print trillions, destroy jobs by the millions, regulate entire industries into oblivion, rebuild an economy on unicorn farts.
It will all work out if you just convince people it will work out. If you just gaslight the plebs you can, say, can run $6 trillion in deficits without inflation. You can crush entire critical swathes of the economy -- energy production comes to mind -- and somehow nobody will notice.
How to fix it?
Simple: Fire the central planners.
End the Fed, disband the ministries of planning from Treasury to the Council of Economic Advisors and dozens in-between. End the deficits that destabilize the economy to buy votes.
Restore the separation of economy and state that built this country, that made America into the model for the world before Wilson then FDR took it apart and handed control to central planners who, by their own admission, still don't know what they're doing after a century of trying. Instead, trust the American people to run their affairs, not the central planners whose only talent is how to break things and lie about it.
Of course, the central planners will not fire themselves, voters have to kick them out. The easy way is voters wake up now. The hard way is voters don't wake up until economic catastrophe does it for them.
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