ABC Index ...
Index Economists
Crack Cocaine Economics
Euphoric stimulus packages that do not last that lead to worse depressing
conditions.
When Herbert Hoover assessed the economic downturn after the 1929 stock market
crash, he wanted to minimize people's worry by not using the word "Panic,"
the traditional word for economic chaos. Instead, Hoover called the downturn
a "depression." The same historical judgement will develop on the economic
phrase: "stimulus."
When a heart stops beating, a stimulus injected into the heart may restart
it. However, if a person chronically stimulates instead of feeding his body,
his heart will permanently stop as his health declines. This is one
of the reasons that chronic users of chemical stimulants (speed, meth, crack,
cocaine and uppers) appear to have bulimia with rotten teeth. Uppers or speed
were often used by housewives to reduce hunger so they would lose weight.
Overdone, a stimulus to one's physical or economic body is an appointment
for embalming or revolution.
Anytime someone receives monies that they did not earn--including pity
money--economic inflation occurs. At a certain point, a chronically ill economic
body cannot rebound from
bad money
policies. Collapse and chaos are inevitable.
The question for politicians and economists enamoured with "stimulus" is
whether their stimulus package is restarting a stopped heart or feeding a
crack habit. Said another way, is the stimulus good or bad? If the economic
body requires repeated deficit-based stimuli, it is an economic crackhead
addicted to artificial stimulants rather than endogenous health. Consider
the trajectory of the following stimuli legislated by
habitual politicians.
Examples 2007-2010
-
Troubled Assets Recovery Program (TARP): To keep the self-inflicted damages
from killing the financial system, billions were given or lent to failing
companies. Given that the companies did not change their ways, stimulating
these companies with cash influsion was economic crack.
-
Clunker Car program: Prices for used cars shot up as cars traded in were
destroyed to prevent being sold for the road. After the program ended, auto
sales dropped precipitously by upwards of 50%. Bad stimulus program.
-
Housing tax credit for first time buyers: Given the falling house prices,
the $8000 tax credit would have shown up as a lower home cost if the habitual
politicians had done nothing. As is, they stimulated at temporary inflationary
bubble after which home sales dropped by amounts not seen for half a century.
Definitely cocaine economics.
-
Economic stimulus, 2009: It was estimated that China received 75% of the
stimulus money with little stimulation of the US economy except
for middlemen buying foreign goods for US consumption. Is it a good use of
deficit spending to stimulate the robust economy of a military adversary?
-
Wage tax holiday: This proposed economic stimulus (Fall, 2010, election season)
will only make things worse. First of all, businesses will have to spend
money running a separate payroll system. Secondly, people are not going to
spend the money because the fact of cancelling wage withholdings indicates
that politicians don't believe the economy will rebound on its own. Only
a fool would not save the extra money in their paycheck.
-
Education stimulus: Pell grants stimulate "for profit" colleges which turn
out low quality graduates that posses a de facto college GED and big debts.
These programs are examples of crack cocaine economics.
-
Disasters: Habitual Politicians are
disaster basturds
. The only viable solution to disasters is a
quarantine.
-
2007, Greece Fires: When the Greek politicians responded to the disasterous
fires by giving people money, they were fueling the fires of economic inflation
and collapse. They should have implemented the
Whole
Plan of the Manheaven Commssion.
-
British
Petrophilia Gulf Oil Disaster: Paying people to do nothing after
a disaster worsens the first disaster with an economic disaster of inflation
and unemployment.
-
VA Tech and 911: Payouts to survivors are examples of crack cocaine economics.
Pity money is an example of people not
caring carefully.
-
Lotteries are examples of economic crackheads: A person who had been in a
productive, needed job suddenly has a windfall of money with which to stimulate
non-essential goods and services. As Las Vegas shows with its collapsed economy
and 20%-plus unemployment, a city, a state and a nation cannot gamble its
way to prosperity. A lottery winner is a beneficiary of an individual stimulus
plan which does not consist of
good money.
-
Monetary Colonialism:
After World War II, the US had not only the largest economy but the only
intact economy. With this economic muscle, we initially helped other nations
until the US habitual politicians started to export dollars instead of adjusting
our economy to new economic realities. By exporting dollars to purchase foreign
products, the US initiated an on-going domestic stimulus for cheap foreign
goods which amounted to monetary colonialism. Like all cancerous stimuli,
the day of reckoning is arriving as foreigners will not accept cheap dollars
for cheap goods. Unfortunately for US consumers, there were a lot of births
based on the artificially inflated economy from monetary colonialism which
are now showing up jobless citizens.
When politicians make good policies then the polity in the polis will be
polite without police.
Like all entities in existence, a stimulus can be quantified in time. Does
it create time? For how long? If it is a
saltwater
policy which temporarily quells the thirst for solutions to one's problems,
then one should not drink the saltwater solution. In other words, if the
stimulus is an example of
Kodak morality then
the benefits are short-lived. Habitual politicians are guilty of Kodak morality
and crack cocaine economics when they use an economic stimulus to bump up
the economy before the next election.
In reviewing the above list, recognize that they accelerate the
existential meltdown by
misdirecting human time away from producing the basics of life. In 2010,
habitual athletes bargained for higher million-dollar wage packages while
teachers, policemen and firemen were being laid off. The President of the
United States has his speeches cut short by network TV while a habitual athlete
buys an hour of TV time to explain why he wants to frolic in the sun.
A stimulus is either creative or cancerous, either good or bad, either living
or lying. The latter contrast refers to how money--whether earned, borrowed
or printed--either stimulates the cost of living or the cost of lying (the
two parts of the cost
of humanity). If politicians and people stimulate their wants and wastes
instead of their needs, they should not be surprised at what they elect when
they vote badly with their dollars.
The impact of how money is spent defines the
quality of
money. As is often said, we get the politicians that we vote into office.
Likewise, we get policies that reflect our personal spending habits. If we
are so dumb as to vote for players and gambling, we should not be surprised
when the politicians wreck the economy with more stimulation of sports and
lotteries. We get the government and policies we deserved.
Afterthoughts:
-
The lottery is a tax on those who don't know math while the stock market
is a tax on a middle-class that ignores math.
-
Do grown jobs or
infrastructure stimuli or grow the economy programs distinguishes
between cost
of living and cost
of lying activities? No, thus, promised hope of renewal is smashed by
feeding the
elephant in the
room which is an unending stampede of rising inflation and joblessness.
The elephant? Global Dying.
-
"We cannot raise taxes at this time when the economy is suffering" is the
same as "We cannot withhold the crack at this time when the addict is suffering."
Kicking the can down the road on economic reform is as bad as giving a crack
addict larger doses to maintain his sunny, pleasant disposition.
Quality Control Tools for Higher
iCube ...
Frog Leaping.
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. The only viable solution to disasters is a
quarantine.