The horizon is not so far as we can see, but as far as we can imagine

The Vast Confusion of Implicit Assumptions Like Wages and Productivity

Ran across this gem:

Paul Krugman, 1994: “Economic history offers no example of a country that experienced long-term productivity growth without a roughly equal rise in real wages.”

Now, this is one of those phrases which is a bit dubious, even on its own terms. “Long run” is doing a lot of work here.

But I’m not interested in that, it’s the embedded assumptions that matter.

Let’s tackle the word “wages” first.

When peasants were forced off the land through enclosures, and went to to work in factories, their wages increased. (Artisans who lost their jobs to factories had their wages drop, but they were a minority compared to the ex-peasants.)

These peasants went from work that they controlled, that was often only a few hours a day, with more days “off” (minus mandatory farm tasks like feeding and mucking) than modern workers, to jobs that often were 6/1/2 days a week, 12 hours a day, except Sundays, where you only worked six hours.

They lived fewer years, they were sick more often, and maimed far more often. They went from jobs with little to no supervision to closely supervised factory labor that was very de-skilled and boring.

Yes, they had more money — because they had to pay for everything (food, housing, etc.), whereas a peasant created much of their daily necessities together with other peasants and were only partially in the “money economy.”

The point is, that an increase in wages does not automatically mean an increase in wages.

After NAFTA, over a million subsistence farmers were pushed into Mexico’s slums. At the same time, the nutritional value of food in Mexico dropped due to deregulation and mergers allowing a few large companies to dominate the processing and sale of various staple grain products, and those companies decreased the quality of their offerings.

These new slum dwellers were pushed further into the money economy: they had to buy everything they needed. If you looked at the numbers, you would say, “Hey, they have more money, therefore they are better off!”

This process happened over and over again in developing countries. Peasants pushed off farms, and into slums, and it often looked like a net win. Usually, it wasn’t. Even in places where it looked like it was, like China, the results were mixed (the happiness data in China shows that those who moved to cities increased their income, but their happiness dropped). In countries that did not effectively develop, it was just a clear, net welfare drop.

This is similar to Western Europeans having lower salaries than Americans, but being healthier, taller (a good proxy for nutrition), and living longer, with higher happiness rates, fewer overweight people, and less illness.

Meanwhile, Americans pay more for worse healthcare, have to have a car, and live in larger houses with more land, farther from their jobs.

Anyway, all of this is a long way of saying wages and welfare are not the same thing.

Now, let’s talk productivity. The economic definition is the ration between output volume and input volume (labor/capital). Perfectly useful definition.

But what it doesn’t include is interesting. If I’m drawing down an aquifer to make bottled water and, in fact, causing that aquifer to be damaged so it will NEVER recover to the same capacity, ever again, but I’m not forced to book that as a negative input, am I measuring productivity correctly?

If I am polluting the air in a way that will cause climate changes that will kill a billion people and ruin tons of property, but I don’t have to book those foreseeable costs as negative input, am I measuring productivity correctly?

If my production is causing general environmental damage which shows that half the world’s species will go extinct, should that be added to the inputs side in negative terms?

If I’m using up dense energy (hydrocarbons) which took billions of years to create and which I cannot replace, should that be a net negative?

In standard accounting, wear and tear for capital equipment is counted as an expense. But the destruction of the environment, people, and entire species is not.

If I’m cold, and I light my house on fire, for a while I will be very warm. No one would think what I’ve done is wise, however — unless the other option was dying. Lighting an entire neighbourhood on fire to save one life wouldn’t be considered acceptable either.

But, in fact, by burning down the world, we are going to kill a lot more people, animals, and plants than by not burning down the world. All of this has left out more standard issues: all the asthma caused by air pollution, all the cancer caused by various chemicals in our food, water, and air, the crash in human fertility, etc, etc.

If you don’t price in externalities, to use the economic term, then you don’t know the actual productivity numbers.

So, what we’re going to find on recalculating productivity properly is that, at some fairly early point, there were no productivity increases from industrialization, and that productivity has been dropping for generations now.

Wages are very often not a good proxy for welfare. Productivity rarely includes all the negative inputs, and thus, is also inaccurate (and we’ve only touched on the issues with both).

When you have embedded assumptions, and you don’t realize what those assumptions are, or think they don’t really matter, you make terrible mistakes. If you create a decision making system (“do it if it makes a profit”) whose numbers don’t include those hidden costs, you can drive yourself very productively, and efficiently, into a hole from which you’ll never be able to dig yourself out.

It’s not that economists don’t acknowledge this. But in practice, they have acted as if it doesn’t matter.

It does. It matters now, for all the people whose lives were made worse over the last couple centuries, and it matters tomorrow, when the full bill will start to come due.

All the content here is free, but subscriptions and donations do help, a lot.


Week-end Wrap – Political Economy – March 28, 2021


The Ludicrous Trans Wars


  1. Joan

    Examining underlying assumptions has helped me to finally see why I was having such unproductive conversations with people. I often wish I’d been able to join the debate team in school, but it counted as an elective and you were only allowed one. Thankfully this is something that can be self-taught in adulthood!

    As a teenager I would say something like “I hate cars” and get a response like “Well, I might have to get somewhere.” That’s because the person I was talking to would hear me say “You’re not allowed to get somewhere” rather than “I hate cars.”

    This arose again when someone would ask me whether I had kids. I’d say no, and their response would be to emphasize that they love their children. This bewildered me, but they were clearly working on assumptions like “I don’t have children, and you *shouldn’t* have your children, or you *don’t* love your children,” or whatever else.

    Overall, I think people these days have very little idea of how to properly structure and identify arguments, and it makes them open to being manipulated, and can lead to a lot of confusion.

  2. Hugh

    “When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”
    “The question is,” said Alice, “whether you can make words mean so many different things.”
    “The question is,” said Humpty Dumpty, “which is to be master — that’s all.”

    The purpose of an economy is to benefit the society in which it occurs. But this means focusing on the lives of the many, not the few. How then can the few accumulate wealth and power at the expense of everyone else? You turn it around. We exist to serve the economy. It becomes not about us doing well but the economy doing well. And “well” means the rich and elites are making out like bandits because they are telling us what “well” is.

    Words like costs, productivity, competitiveness, and efficiency are more weapons than useful economic measures. Productivity, competitiveness, and efficiency are good sometimes and up to a certain point. Look at Apple. It could have been really profitable and treated its workers really well too. But it didn’t. It will sell out anyone, its workers, its customers, to balloon its bottomline, not us, not society, for as long as it can. Bezos is like some unrepentant Scrooge who walked out of a Dickens’ novel. He built up Amazon by flouting tax laws and treating Amazon workers like sh–t. It did not have to be this way. In exchange for a good and decent life for all, we have been sold a criminal fantasy of great power and wealth that our work and misery created but which we do not enjoy. That’s for our betters, our criminal class.

  3. Eric Anderson

    I’ve been saying for at least a decade that the entire premise of capitalism is based on unaccounted negative externalities. Should those negative externalities be accounted, what would result is a steady state economy. Which should be our goal.

    To paraphrase Bush, it’s the negative externalities, stupid.
    That’s what capitalists call growth.

  4. gnokgnoh

    Ian, you are likely familiar with Jason Hickel. His most recent article strongly supports your thesis. Hickel article.

  5. gnokgnoh

    This one even more so. Is the world poor or unjust?

  6. NL

    And on top of paying for a vehicle + gas, we will be soon paying for a mile driven. Wonderful! That will get the economy going. It will increase our GDP and together with GDP increases stemming from legalization of drugs and gambling (and prostitution not far behind) will put us right back ahead of China’s GDP, mission accomplished. Plus, yearly (or even more frequent) vaccinations to maintain your vaccine passport current, paid for out of pocket or through higher health insurance. Plus higher taxes on the technocrats earning six figures. The outlines of coming life are looking wonderful…

    Going back to the vaccines: Drew Weissman, a pioneer of the mRNA vaccine, addresses some of the issues that had been brought up regarding the mRNA vaccines in a just-published short write-up for medical workers reluctant to take the vaccines, read it here (a high school bio should be enough to understand most of it):

    Some of the things, he freely admits:
    ->there are no previously-approved mRNA vaccines
    ->the long-term (beyond the 2 month trial period, my addition) durability of protection is not definitively known
    ->the virus has the capacity to mutate to evade our immune system
    ->”While adjuvants have been utilized for decades, their mechanism of action is not entirely known. The Moderna and Pfizer/BioNTech Covid-19 mRNA vaccines stimulated a protective immune response with LNP acting as an adjuvant2. This adjuvant is novel in that it specifically induces a CD4+ T cell helper response that stimulates antibody production, maturation, class switch, and long-term memory, known as T follicular helper cells.”
    ->Another concern expressed by some is that the development and FDA review of the vaccines occurred too quickly for the vaccines to be adequately vetted.

    My personal additional question is: how will the immune system know that the mRNA-encoded protein is non-self and produce antibodies for it? My concern is that the immune system may decide that the protein encoded by the mRNA is self and NOT develop antibodies for it (at least in some people) and there will be no immunity. The reason the mRNA vaccines use modified RNA nucleotides is to prevent the immune system from recognizing the injected mRNA as non-self (see the write-up). Once the injected vaccine mRNA is taken as self, then why should the resultant peptide be recognized as non-self? Furthermore, this same mRNA technology is used in gene therapy where the protein encoded by the mRNA is expected to be recognized as self. If anyone has an answer, I am all ears. Right now I don’t know enough to have an answer to this question.

    Weissman also has a very long review of the fat particles used to deliver mRNA in the Moderna and Pfizer vaccines (look it up). The AstraZeneca vaccine uses adenovirus to deliver DNA into the cell.

    mRNA vaccines are fine, but not enough. We need a whole stable of different vaccines to get at the one most effective and safe.

  7. Mark Level

    An important and noteworthy article/ perspective from Ian as usual. Yes, the assumptions of our ‘”betters” such as that great “liberal”, even “man of the Left” (haha!) Krugman are awfully skewed. And as an economist, one would assume that he knows his economic externalities, etc. But it matters not, people in (his, the Ruling) class are doing well, so the rest of us clearly are, as well!! There will be an economic balancing of wages “some day” just like good Christians believe in some justice in an afterlife, after all one doesn’t wish to become bitter . . . .

    I’ll even agree with and applaud Hugh’s contribution today, as it is all true and makes sense and does not involve any praise for “our” US interventions “on behalf of” the poor, benighted brown people who don’t want or accept our “wonderful” yet very toxic US lifestyle.

    And speaking of thinking outside of those conceptual boxes we can all get trapped in (like the so honored Mr. Krugman), 1 interesting thing I recently came across in a 2013 issue of AdBusters was the study of WEIRD society’s perceptions (our society’s) vs. others in this broad and blessedly variable world that we still have not entirely converted to McD’s “restaurants” and parking lots . . . for those open-minded enough to look at perceptions and ideas not from the World’s Greatest & Most Exceptional Society (TM), here’s a link to why modern psychological professionals are so off-track in understanding the range of options and opinions available to human beings, from a 2010 Nature piece, which also shares some insights into why our social science experiments in economics go awry in strange, foreign societies where others may not be as rich, distracted, conflicted and stressed as us— “Most people are not WEIRD,” by Henrich, Heine & Norenzayan.

  8. Mark Pontin

    You don’t go far enough in this case, Ian.

    In the U.S., some 80 percent of all bank loans are mortgage loans. That bank profit — from inflating already vastly over-inflated real estate values — is counted as productivity by the methods of calculating GDP that neoclassical economics applies.

    Yet the house that sold for $50,ooo in the early 1960s and is supposedly worth $1 million in 2021 is still the same house. Obviously, no real material wealth has been created.

    The same applies to the vastly inflated asset values in the stock market. When the factories have mostly been offshored, this is mostly not real wealth.

    In the West, since the 1970s the financial industry and the banks have been allowed to buy and control the politicians, and have used the junk ideology and values of neoclassical economics to sell the notion that financial industry profits are real productivity and wealth and GDP-growth.

    They’re not, of course. The financial industry has created a massive Ponzi — because that’s all neoliberal financialized capitalism is — and much of the West is much poorer than it’s been conned into believing.

  9. Astrid


    One method I find that’s somewhat helpful for those types of conversations is to be a little disingenuous. So I would say I don’t have kids and immediately follow up by saying that I like kids but don’t want kids enough to take on the responsibility. I actually don’t like most children, but focusing on the responsibility aspect flatters the parents and deflects the defensive responses about their choices. It gives enough space for me to gauge their response and decide where to take the conversation.

    As for economics. I started out as an econ major and quickly realized a “science” that writes of anything that’s difficult to quantify, doesn’t leave much to work with. Only later did I realize this was intentional. Economists serve a similar role as astrologers and priests, to weave a somewhat convincing narrative on behalf of the powerful. The pieces that do not fit does not matter to them, never matters unless it risks overtaking their narrative.

  10. Hugh

    Mark, it all comes down to do we have the wherewithal to build and maintain the society we want for ourselves and each other. I would say working our population down over time and rebuilding a sustainable industrial base are doable. Not saying we will but we could.

  11. GDP is a really lousy way to measure an economy. If I pay you $20 to mow my lawn and you pay me $20 to mow your lawn we have generated $40 toward GDP. But what have we actually produced, given that we could easily each have mowed our own lawn at the same expenditure of effort and contributed$0 to GDP?

  12. NL

    Bill H
    If I pay you $20 to mow my lawn and you pay me $20 to mow your lawn we have generated $40 toward GDP.

    My issue with the GDP is that $20 spent to mow the lawn is no different from $20 spent to run a high performance computer — i.e., it is a brute quantity measure without any quality component whatsoever (which – I think – is also a point being made by Ian). This is what I am alluding above talking about legalization of narcotics, gambling and soon prostitution. Why are these items even in the GDP? My favorite peeve is of course the so-called tech companies, like Uber, Amazon, Airbnb — what is tech about them, each just has an app connecting a customer with a service provider and has thousands of service providers versus a couple hundreds at most of IT personnel. The labor provided by the service providers is low-skilled low-productivity labor —
    – driving a car is not high tech. Putting food on a shelf, then having a ‘professional’ shopper take it off the shelf and put it into a bag and having another ‘contractor’ drive it to you (like what Amazon/Whole Foods does) is not high tech and is in fact the opposite of it — it is third world (no offence to the third world). Even the tech sector — when was the last time Microsoft issued a truly useful update? Every time I have an approaching deadline, and this thing is trying to force me to update Windows, which feels like every couple of weeks, I truly wish whoever had this ‘bright’ idea about updates has a really really terrible afterlife. I now have dual partitioning and Linux Mint — one of these days this thing will push me hard enough to abandon it completely. As the pandemic showed, ~20-30% of our GDP is low tech, low productivity eating, grooming, entertaining, taking Uber, bar-hopping, etc – things that should be really a small part of our GDP. Here’s a moribund example, what % of our GDP is now hospitalizing and burying the COVID victims? Do we want this type of GDP?

  13. Joan

    Thanks Astrid!

  14. Soredemos

    Krugman was wrong (or lying) anyway. Even by just the mid-90s it was clear wages were lagging productivity by a significant margin. And things have only gotten worse since then.

  15. capelin

    Triple Bottom Line Accounting is a/the codification of what is being discussed.

    The triple bottom line aims to measure the financial, social, and environmental performance of a company over time. The TBL consists of three elements: profit, people, and the planet. TBL theory…

  16. js

    “My favorite peeve is of course the so-called tech companies, like Uber, Amazon, Airbnb — what is tech about them, each just has an app connecting a customer with a service provider and has thousands of service providers versus a couple hundreds at most of IT personnel.”

    with Amazon obviously Amazon Web Services. But that’s not a large part of the business? It is currently 67% OF THEIR PROFITS, for many years it was the only profitable part of their business. So if 2/3s of one’s business, at least in terms of profits, is tech, and you are classifying the business as an investment, of course it makes sense to classify it as tech.

    Uber and Air B&B are quite different animals, I don’t think they have much tech business. Uber was off on the self-driving car thing for awhile, but I doubt that was every anything but a cost.

  17. NL


    AWS is a tenth or so of their revenue, and yes, it is profitable and heavily funded by the DoD: . I would bet that Amazon is being just opportunistic, without the DoD support, they would not do it. I would also bet that Amazon sells unused computing capacity when DoD does not use it. The rest of Amazon is a reseller (warehouse workers working to a pulp) and a marketplace platform. I suppose if one counts marketing as tech, they are tech.

    I am ambivalent about cloud computing and storage. What will prevent a cloud storage company from grabbing your data, start charging unreasonably more, offering a view of your data to someone else, preventing you from accessing it, losing it? It’s a dog eats dog world out there, and I guess, if I were a CEO with a 3-5 year survival horizon and an interest to drive share price up, I would be like ‘who cares, let’s do cloud to save a couple of bucks’, but otherwise, I am not so sure. We all know that the push of the common apps (like Word) into the cloud is a scheme to force us to pay rents for this old technology. I have not used Microsoft Office in years. The regular user has no choice but to go with what the monopolies will force them to do, but high-end users want freedom and control. Most of the ‘big data’ stuff is done on freeware Linux, R, Python, etc, although the monopolies eyeing those apps as well. The monopolies’ ideal situation would be that anything one does on their apps automatically becomes their ownership, but in that world innovation is impossible.

  18. someofparts

    The impact covid is having on our trust in public information gets more interesting by the day. I’m wondering if the inevitable failure of every administration to beat covid and go back to normal will make politics even more volatile going forward.

    Right now Biden’s support is up because he promised to handle covid and for now it looks like that is happening. I wonder what public opinion will look like a year from now when this rosy picture is showing some tarnish?

    What happens when people realize that (1) they will need a vaccination every three months and (2) it will cost $1000 each time, but (3) they still have to wear masks because (4) they can still catch or transmit the disease and (5) over time the damage a person incurs from taking the vaccine repeatedly is more harmful than covid itself?

    Meanwhile, in other parts of the world, people use ivermectin with success. In Russia, a promising vaccine may work the old-fashioned way and provide lifetime immunity against all varieties of the pathogen.

    So I’m watching trends like this and wondering how the media in the country will manage public consent against headwinds like that. The public conversation is going to change one way or another.

  19. NR

    What happens when people realize that (1) they will need a vaccination every three months and (2) it will cost $1000 each time, but (3) they still have to wear masks because (4) they can still catch or transmit the disease and (5) over time the damage a person incurs from taking the vaccine repeatedly is more harmful than covid itself?

    And if, in a year’s time, none of the things you listed above have come to pass, will you come back here and admit you were wrong?

  20. NL


    Hope for the best, prepare for the worst — nothing wrong with that, seems prudent to me. Of course, we need to imagine first what the worst is.

  21. someofparts

    If everything works out and we beat covid and go back to normal I will be delighted to come back here and sing your praises for your wisdom and judgment. Let’s hope that happens.

  22. bruce wilder

    Public trust is at a low ebb generally, the glow persisting around ol’ Uncle Joe notwithstanding. Some wag once said, the future is already here, it just hasn’t been evenly distributed yet. I think distrust in public institutions is not evenly distributed yet — either among the public expected to do the (dis)trusting or among the institutions to be (dis)trusted.

    An important factor to consider is that some are reacting by insisting cross-grain to the evidence and the experience that “the science” deserves trust, that, say, Dr Fauci is a saintly genius. Noting for what it is worth, true to the modus operandi of the corporate woke, the guy who ran Operation Warp Speed successfully has been cancelled (due to substantiated charges of sexual harassment). (He’s rich and will be fine, but still a warning has been sent I think about being careful about the company you keep while doing the good you do.)

    Poor performance is not usually enough by itself to arouse most people — most people do not grasp that leadership matters or how it matters — at best they are superstitious — demanding costume and gestures and well-timed applause or laughter from the studio audience. To some extent disenchantment has begun, as people question the bona fides of said “studio audience” that laughs at unfunny jokes and applauds failure.

    Politically, it is interesting that Cuomo is under attack after years of bad governmenting. Newsom may be recalled. And, Florida did not suffer much for its apostacy.

  23. someofparts

    Well, trying to stay in the same solar system with Ian’s topic, I was trying to focus on how our public information sources, those managers of our implicit assumptions, would respond to impending events. It seems to me that the events that are underway even as we speak are driven by full-on corruption so that performance of any sort, poor or otherwise, is becoming an unfamiliar concept to many people. Instead of asking what works or doesn’t work, they ask who is to blame or who is above blame.

    I heard that in FDR’s day all of the press, coast to coast, were all vehemently against him. That is how the systems that manage public consent handled the threat of populism in the 30s. Now we have a much more versatile, more powerful system for managing our consent, so I assume the methods of control used against us will be more complex and effective. Will they use trolls on sites like this one? Of course. Will they use surveillance and eventually rendition against us? Probably. Will the media continue to stupefy anyone who still trusts them? Absolutely.

    Talking to friends of mine in real life who are not as pointy-headed as the regulars who comment here, I have recently learned that the words ‘neoliberal’, ‘rendition’ and ‘private equity’ are entirely unfamiliar to them. That does leave me wondering what their assumptions about our situation might be and whether it will be possible to talk to them about anything important at all.

  24. NL

    Behind Biden’s Big Plans: Belief That Government Can Drive Growth
    “It all marks a major turning point for economic policy. The gamble underlying the agenda is a belief that government can be a primary driver for growth. It’s an attempt to recalibrate assumptions that have shaped economic policy of both parties since the 1980s: that the public sector is inherently less efficient than the private, and bureaucrats should generally defer to markets.”

    Question 1: Is this worth doing?
    Question 2: Will it even work?

  25. gnokgnoh

    SOP, your last paragraph answers many of your first generalities. All systems are made possible because most people are simply living their lives, earning money, raising kids, and trying to ignore the noise of politics or less metaphysical threats, like climate change. Stuck tankers in the Suez Canal are a welcome relief…a story with a beginning, a middle, and an end. They are, of course, easy targets for consumerism, for ideology, for whatever. The WeWork phenomenon was, partly, religion for millennials and GenXers (see the documentary) who worked there. We’re not just working, we’re changing the world. Hokum.

    NL, they’re following standard Keynesian economic theory, drive growth during depressions/downturns. The flip side of the theory is that once the engine is kick-started, let the market take over again, using fiscal policy to guide it. Of course, Obama never stopped QE stimulus funding, especially of the financial sector. He modeled permanent, government-driven growth…of the financial industry. Our current stock market is the result. There is no tidy “they,” by the way. The incentives are built into the system.

    At least Biden is attempting direct funding of main street. Now the FIRE folks are screaming inflation…can’t have wages (and prices) rise too much.

  26. NL

    Of course, Obama never stopped QE stimulus funding, especially of the financial sector. He modeled permanent, government-driven growth…of the financial industry. Our current stock market is the result.

    No offence, but the above sounds like complete gibberish…

  27. Hugh

    NL, technically it was the Fed. And the financial meltdown began under Bush, But Bush, Obama, Trump even pre-covid, and Biden currently have had no problem with the Fed (as in cheered on) juicing stock markets with trillions in cheap (low or no interest) money, essentially to bail out the rich and keep them rich.

  28. different clue


    Krugman is pretty smart. He is smart enough to know which way is up. So I think Krugman was smart enough to know he was lying.

    Krugman was also a Free Trade hasbarist right from the start. He has always been a well paid propagandist for the IFTC ( International Free Trade Conspiracy).

  29. different clue

    @ Bruce Wilder,

    That quote is attributed to S F author William Gibson.

  30. NL

    …But Bush, Obama, Trump even pre-covid, and Biden currently have had no problem with the Fed (as in cheered on) juicing stock markets with trillions in cheap (low or no interest) money…

    Somewhere I just read that Greenspan made his pronouncements purposefully obscure so that everyone got completely confused and could never put the two and two together. He has done a marvelous job. I feel like I had this discussion with someone on site. The FED does what it is mandated to do and what its purpose is, and ultimately the people responsible for the monetary policy are your senator and your representative. I don’t really know or care whether both Bushes, Obama, etc personally had a problem with the FED (they personally did not matter, personification of the policies is a trick to misdirect and misinform). The monetary and industrial policies favoring the financial industry over other industries were set in 1970s. We see results of those policies.

    In 2008 I did not know enough, so I thought that the monetary policy will change to inflate the public and personal debt created in the so-called ‘housing bubble’. Some think now what I thought in 2008 (see Ian’s post on the big growth). Now I understand that the public and personal debt is the oligarchies’ wealth. That’s how the monetary mechanics work in the US, and in this monetary mechanics the American people have no say in money issuance. Major private banks and the so-called bond vigilantes, faceless private individuals, control our monetary policy. It is not even the FED. If anything, we are witnessing now a struggle between the FED that wants to continue money injections into the monetary system and the bond vigilantes who worry about a dollar collapse and drive the interest rates on the treasuries up. So, we are having a paradoxical situation whereby the FED is screaming we will ‘print’ to the sky and force interests on treasuries down and the bond vigilantes are saying not so fast, we will not allow you to create all that money. The banks and bond vigilantes can refuse to buy US government debt, then the government will not have money to finance the “Biden’s big plan” or whatever else. This is again because — the FED DO NOT CREATE money. The bond buyers create money by purchasing government debt. The money system was set this way (note this sentence is passive and does not have an agent) to take away money issuance and thus the ability to inflate debt and the wealth of the oligarchy away from the hands of the public.

    In any event, most individuals don’t care or can’t fathom this. But hopefully, someone will read this and become curious and begins asking the right questions.

  31. different clue

    The last few paragraphs of this post bring up something I used to think about in a very stick-figure way.

    We think about Gross Domestic Product and try to measure it.

    We should also think about Gross Domestic Destruct and try to measure that too.

    And then see which number is larger. And subtract the smaller number from the larger to get the Ned Domestic Whatever.

    So if the Gross Domestic Destruct is larger than the Gross Domestic Product, we have an overall Net Domestic Destruct. And we could perhaps even think about how many years we could operate at that Net Domestic Destruct before we have nothing left to destroy for love or money. And when we reach that point, we all die.

    Amateur economics buffs don’t have to wait for the professional economists to decide if they want to permit themselves to think about that. Amateur economics buffs can begin thinking about it right now if they want, and begin thinking about how to measure the Gross Domestic Product and the Gross Domestic Destruct and see how the two add up.

Powered by WordPress & Theme by Anders Norén