Learning from the past

A great analysis from john jay at summer patriot, winter soldier:

this is not meant to be at all reassuring, even in the least little bit ....
in response to the great depression politicians and economists turned to government to stand as the bulwark against economic "cycles," and to protect the public from the harsh realities of periodic downturn. you don't hear much about "economic cycles" anymore, the term having fallen out of fashion, as intrusive government was supposed to have made "cycles" impossible.

the great depression, insofar as i am aware, did not find its causes in government intrusion into or regulation of economy. in fact, to all appearances, for a while it looked as though economic salvation lay in such intrusion. and, it seemed rational, and highly politic, to conclude that government intrusion caused economies to rise out of the depression, and to function at full strength again.

i see no particular parallels in the economic situation now before us, to the circumstances of the 1930's, as regards economics.

i do, however, see almost exact parallels in the current situation in western democracies to those conditions immediately preceding and governing the downfall of the economic system in the soviet union. the soviet union did not fail politically. it simply went broke, it could not meet its obligations, its money became worthless, and the second greatest military power on earth mothballed its fleets, let its intercontinental ballistic missiles rot in their silos, and subjected its officer corp and massive bureaucracies to the indignity of first receiving payment in worthless rubles, then not being paid at all, and then serving essentially for room, board and eats.

the chinese watched this. and they saw the saw fate befalling them. and they turned away from that fate, embraced free market dictates and began a ruthless process of cost cutting, economizing, worker layoffs and modernization to avoid what had happened to the soviet union. it caused much upset and unrest, but the chinese stayed the course to modernization.

as did, essentially the soviets, when they saw what the chinese had accomplished.

the west has essentially followed the two great marxist economic "experiments" which led to absolute rack and ruin down the same path.-- unlimited spending on social welfare, subsidized labor that did not work, cronyism in the bureaucracies, and government regulation of wage scales, production and marketing. the soviets had factories and industries that didn't produce, and industrial plants were the place where workers didn't work and indeed often sat around in drunken stupors.

and, soviet economists learned to lie to cover up the economic malaise.

just as western economists, statisticians and news reporters have learned to lie in order to keep an ignorant public duped, stupefied and largely ignorant of what goes on around them.

let us take, for instance, labor statistics or to be more precise about the matter, the issue of the correct figure of "unemployment," the rate of which is supposed to be an economic bell weather, and hence, worth lying about. the federal government reports, and the mass media dutifully regurgitates that unemployment in the united states is at 9.0 to 9.1 percent, and coming down.

bullshit.

if you use the old way of reporting unemployment, as was used in the 50's & 60's, unemployment hovers around 20% plus, ... , in other words, right around genuine depression levels. anybody with a brain in their head knows this, and knows the knew figure is "adjusted" for this and that reason, but, principally, to "stay" below 10%, a sort of mystic thresh hold.

this is the practice of truth as it was done in the marxist soviet union before its downfall, and it is the practice of labor statisticians in the industrial west now.

in short, the western democracies, having picked up marxism just about the time that the marxist were proving beyond any doubt that it is an absolute economic disaster, has also picked up "the big lie" as a means of governance and public policy.

the west spends as though money means nothing, as did the soviets. the west has moved quite rapidly to centralize its economic planning, and to control the means of production by means of centralized regulation, and the west has adopted the rubric of "a living wage" which is nothing more than the soviet doctrine of having workers in factories who do absolutely nothing in order to prove that the economy is functioning at "full employment, and full production."

and, surprise of all surprises, in fact, we may describe it as the "mother of all surprises," it hasn't worked any better here than in the soviet union, and is leading western society to the exact economic ruin that brought down the soviet union, and made life in the people's republic of china an insufferable hell until they resurrected free markets, supply and demand, and the true profit and loss ledger, from the dust bins of history.

we are not in a great depression.

we are, rather, precisely as were the soviets just before the fall, in a situation in which government intrusion into every facet of life and accompanied by senseless and idiotic bureaucrats have spent the country into near oblivion.

the piper will be paid. it is as simple as that.

Emphasis mine -- what he said. More at the site.