Obama’s America=Weimar?Trevor Parry
Attempting to analyze policy purely through the lens of economics without consideration of historical antecedents is pure folly. As we all know life is much more than what a spread sheet can show. One wonders however if Chairman Bernanke and the Federal Reserve have reviewed their current monetary policy with an eye toward past history. The Chairman is considered to be the foremost expert on the monetary underpinnings of the Great Depression and his belief in the creation of an unprecedented currency bubble is supposed to warn off the horrible effects of such economic calamity reoccurring.
History would offer the Chairman, and his amateurish boss in the White House a myriad of examples that could constitute what they like to call a “teachable moment”. The current monetary fantasy is to spur economic growth through a policy of “quantitative easing”. This jargon is nothing more than a ponzi scheme that has been tried without success for the entire Obama first (and hopefully last) term. The concept that the Federal Reserve can rely on the status of fiat currency to buy up an exponentially growing U.S.public debt is sheer folly. Without a growing economic base the result is predictable, hyperinflation and economic collapse. Even the Chairman’s reading of the Great Depression is incorrect. The New Deal and FDR’s interventionism prolonged the morass for years longer than was necessary.
America has jettisoned most of its industrial base, keeping a few showpiece industries as wards of the state while its best known companies produce their goods in overseas markets due to cheap labour costs. One remembers Weimar Germany, who in response to French occupation of the industrial base of the Ruhr resorted to printing money. The result was a wheelbarrow of worthless deutschmarks to buy a loaf of bread and the inevitable rise of a demagogue with cataclysmic consequences. While I am not comparing the current President to Hitler it is not a leap to characterize his demagoguery and complete lack of understanding of business and wealth generation as characteristics we have seen before.
American needs to rediscover what made it great. Risk taking, fair rather than punitive taxation, minimal and predictable regulation and a government that did not put the brakes on economic progress all must be part of the next administration. Relying on a monetary alchemy will only hasten an already pronounced decline. Markets are self correcting. Excessive interventionism and manipulation removes those curative elements and results in misery. Let us hope that the American voter looks to the past to understand what could be a real future and they reject Barak Obama and his monetary politburo in November.
Posted: September 25th, 2012 under General.