Fake, Freak and Pretend

SUBHEAD: There is never any discussion about whether more growth is what's best for society... It's simply all they know.  

By Ilargi on 24 September 2009 in The Automatic Earth


Image above: Anamitronic prognosticator 'Robot Coneventional Swami" available for $75,000. From http://www.techchee.com/2007/10/05/hand-your-destiny-over-to-the-swami-conventional-robot

 When President Obama was on Letterman earlier this week, one of the first things he said on the economy was something to the effect that 'most economists are now seeing a recovery'. But how can you not wonder these days who the economists are the president refers to, and what those same economists were saying a year ago or 2 years ago about the state of the economy?

You would wonder about that because the number of economists who were even remotely close in their predictions back then easily fits on the fingers of one hand, and moreover the ones that were correct are by no means necessarily the ones who have the president's ear. Hence, you now find yourself with a president whose economic policies are based on the assumptions of a group of people who in general have been god-awfully wrong throughout their entire careers, and most of all when it counted.

They can describe in 1000-page tomes what happens within a system that doesn't move much, but as soon as there are substantial fluctuations, none of their theories have any relevance. Economics is not a science, it just poses as one. And economists are not scientists, even if they have imposing titles behind their names and a Swedish Central Bank award that has hijacked and plagiarized Alfred Nobel's name, intentions and stature.

You don’t even have to look all that close to realize that the economists who have the largest influence on today's policy-making, people like Alan Greenspan, Ben Bernanke, Tim Geithner and Larry Summers, despite yawningly drawn-out discussions about the differences between Keynes and Friedman, are to a man the proverbial hammers that can see only nails.

All the policies executed so far, and all waiting in the pipeline, have the same basic idea. That is, when there is a problem, throw money at it. Too much debt? Throw money at it. There may be trivial differences in the amounts of money to be hurled at a particular issue, and their precise source (though in the end it will always be the silent majority that pays), but down the line it all remains inconsequential.

Quantitative easing is one of the policy measures that has been heavily used in the US and UK this year. But there is zero proof that it will, or even can, actually work. In fact, what evidence there is comes from Japan, where QE has definitely not worked at all over the past 20 years.

What makes QE so appealing, of course, is that it provides economists with the chance to do the one thing they know how to do: throw money at a problem: Hammer that nail. And if at first you don't succeed, there's always that one option left: Throw more money at it. For economists, truly, the world is flat. Obviously, there are plenty examples of fake, freak and pretend sciences around.
• The sun revolves around the earth.
• When Jesus was born dinosaurs roamed the earth.
• Plentiful oil is being made inside the earth as we speak.
• And people can solve any problem they create if and when they choose to do so. 
What makes economics special among pretend sciences is that everybody, not least of all leading politicians, believes in what economists proclaim. Which is no mean feat, given the fact that these guys have a track record that makes local weathermen look like absolute geniuses. Given that troubled picture of economics and economists, why on earth does a man like Obama bring up their latest predictions, once again, as a justification for his latest economic policy decisions? Because he doesn't have anything else, that's why.

And secondly, because the message that emanates from present day economics is such an ideal fit for the financial world that has essentially taken over the government, you’d almost think the curriculum at economics schools is set at Goldman and Federal Reserve headquarters. It is?

Nothing better for these institutions and their executioners than a license to spend everybody else's money. The smartest economists may well be the ones who don't buy the message at all, but have recognized its potential for generating unparalleled profits.

The rest of them function merely as facilitators and justifiers for a system that is bankrupting the nation at breakneck speed, all so-called analysis geared towards confirming not what is, but what is desired.

In Obama's message, and in Geithner’s, as well as all through the G-20, the same old one-dimensional flat world goal trumps all: Growth! There is never any discussion about whether more growth is what's best for society, it's simply all they know. Ask any physicist about the idea, and they’ll laugh in your face. But they don't make economic policy. And the people that do, though they have their fingers on all the wealth and future wealth of the nation, have no Plan B. That is scary.

Meanwhile, maybe this will spur some thought. During the present crisis not a single policy has been approved and executed, ostensibly with the goal to counter the over-indebtedness of all facets of society, that has not added to that same debt. In my dictionary, that is called perverse.

See also:
Ea O Ka Aina: The End of Growth 8/6/09
Ea O Ka Aina: American Growth Economy Over 5/19/09
Island Breath: The Limits to Growth 6/9/08
Island Breath: Economic Growth to end soon... Forever 5/3/07
Island Breath: Smart Growth Won't Work 3/17/07
Island Breath: Sustainable Growth Impossible 8/5/06
Island Breath: Sustainability & Growth 4/19/05

The Gobbler: Economic Health vs. Growth 5/1/93

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