I was thrilled to see the headline "Nip Inflation Before It Gains Steam" on an
article by Robert Samuelson of The Washington Post Writers Group, because he is
exactly right; inflation is a Terrible, Terrible Thing (TTT), and it is
imperative that there be a lot of nipping to stop inflation. Like US TV
favorite deputy sheriff Barney Fife famously said on the Andy Griffith Show
about children's misbehavior, you have to "Nip it in the bud, Andy! Nip it! Nip
it!"
The classic example is the French Revolution, which was caused by ruinous
inflation in prices of food and commodities, thanks to the idiotic French
government creating so much money for years. A better-known example is Weimar
Germany, and a lesser-known example is the Russian Revolution, which created
the money to
wage World War 1 and caused food prices to skyrocket.
Then Mr Samuelson shows that he is apparently just a doofus who fills up his
day by happily writing any crap that anybody in a suit and a position of
authority will say to him. To show you what I mean, he writes that US Federal
Reserve chairman Ben Bernanke argued, "The economy today is much different from
the mid 1970s." Mr Samuelson opined, "He's right."
I thought that when he added that comment of "He's right" at the end, he would
go on to explain that "In fact, things are much worse than in the '70s and the
Irritating Idiot Mogambo (IIM) was right! The Federal Reserve creating so much
money and credit has destroyed the dollar! We're freaking doomed!" But he did
not.
Unbelievably, instead, he writes that the inflation in this country is about 4%
and that unemployment is less than 6%, which is supposed to be good news
because, "In 1974, inflation (as measured by the Consumer Price Index) was 12%.
Unemployment in the parallel recession peaked at 9% in early 1975."
What this newspaper ignoramus is saying is that he is some big blowhard expert
on economics, but yet he is not remotely aware of the any of the constant
jiggling of the CPI over the decades by the corrupt government trying to
destroy the inflationary evidence of its gross mismanagement of the economy,
culminating in the despicable actions of the odious former Fed chairman Alan
Greenspan and the equally despicable economist Michael Boskin in the '90s to
introduce such bizarre, inflation-concealing concepts such as "the substitution
effect", "the wealth effect", and "quality improvement (hedonic) effects", so
that the Consumer Price Index now has only a vague, passing resemblance to real
inflation in prices.
This does not even get into the fact that the Bureau of Labor Statistics spent
the last couple of decades constantly re-defining "unemployment", and thus who
is "officially" unemployed, down and down, so as to make the government appear
NOT to be completely mismanaging the country! Hahaha!
I laugh that Mr Samuelson is also admitting that he is completely ignorant of
John Williams and his shadowstats.com, where inflation is calculated the way it
was actually measured in 1974, and which shows that price inflation is now
HIGHER than it was in 1974, with inflation now being up around 13%!
And Mr Williams also calculates unemployment the way it was measured in 1974,
too, and it shows that unemployment is higher now, too, at over 10%!
Mr Samuelson, for all his staggering ignorance, does admit that "all large
inflations involve 'too much money chasing too few goods' as economist Milton
Friedman often noted, and this episode is no exception". To underscore the
point, he points out that "the Fed is holding its key interest rate at 2%, well
below prevailing inflation." Negative interest rates!
He thinks that this is trumped by saying, "By contrast, today there's not yet a
wage-price spiral. Inflationary pressures seem to originate mostly in rising
raw materials prices." Hahaha! This is not only wrong, but also parochial and
insane! There is no wage-price spiral in the US of A, admittedly, but
foreigners all over the freaking world are seeing the incomes shooting up,
sometimes by 10% or more! There's your freaking wage hike, and their rising
demands for commodities are producing the price hike, so there is your
wage-price spiral, you dumb weenie! Jeez!
With media like this, with schools like these, with a government like this,
with a central bank like this, it's a wonder we lasted as long as we did!
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2008, The Daily Reckoning.)
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