WHY I AM NOT AN ECONOMIST

Picture courtesy of Wikipedia

BY MICHAEL LINN JONES

On the surface, the answer is simple: I don't have a degree in economics. It's a fascinating subject, though, with many differing opinions influencing how we all live. And how healthy a republic we have, also.

Having been denied by fate the intellectual capacity to understand the myriad of details tossed about by economists, I can only rely upon the "big picture" to a certain degree. And the great thing about economics is that, like psychology, it is a profession of opinion. Despite many learned prognostications, economists are constantly stuck with explaining why the opinion expressed several years ago was found invalid by events.

There is that old saying, "The main thing is to keep the main thing the main thing." Nathan Bedford Forrest understood that. No, not as an economist but as a soldier. Despite the fact that he never received any formal military training, and despite being looked down upon as a lucky rube by West Point-educated soldiers, it is HIS tactics used in the Civil War that are studied to this day.

Forrest was not an economist, of course. But he is illustrative of the fact that there are times when a lack of formal training does not detract from someone's ability to think, and think quite well. It might never occur (and would be refuted heatedly) that common folk might actually have a grasp on the essentials, particularly when they are self-evident.

One of the problems associated with reading is that one can quite inconveniently remember things. One example is during the 1960's....Lyndon Johnson was bemoaning the fact that he wanted low taxes, the Great Society, and the Vietnam War, all at once. LBJ always liked everything all at once. When an aide suggested approaching Wilbur Mills (then chairman of the House Ways & Means Committee) LBJ balked. He said that Mills would give him all the money he wanted for war, but the Great Society would be de-funded. So Johnson did what he was very good at: he lied.

The stagflationary pressures LBJ started were passed on to Nixon, Ford, and Carter. Economically they were interesting times.....for everyone, including the very wealthy.

We have another Texan in the White House, who also wants it all....and all at once. Unlike LBJ however, George W. Bush hasn't much regard for the powers of Congress, or the Constitution, or common sense for that matter.

A nation can no more live beyond its means than an individual can. Borrowing money to invest in an enterprise that will generate a profit makes sense. Anything else is asking for trouble. One weird thing about economics is, analigous to a pond, sometimes a tossed pebble can create a tsunami.

For years the practice of subprime mortages made a lot of money in a speculative manner. It's all right, though, said the experts. Other experts with similar degrees said otherwise. Events have borne out the naysayers. But with a house of cards collapsing, what is the remedy? Save the speculators, of course....our economy is held hostage by the notion that to let (otherwise) sacred "market forces" correct the stupidity of some would hurt us all. It goes back to that old saying that pigs get fed and hogs get slaughtered.

Except in some cases the hogs just keep getting fatter. The Federal Reserve lowered interest rates in order to shore up the mortgage market...to protect the stupid. This resulted in a lower dollar, which encouraged a lot of money to flow into the oil commodities market, which is resulting in higher oil/gas/heating oil prices.

It's fair to say that when we now fill up our cars or heating oil tanks we are in essence paying a tax. Or more accurately, a penalty for others' screw-ups. Many bemoan the fact that such things hurt the middle class. Well, you have to wonder sometimes what the middle class is. I've known people who are millionaires who wear scuffed shoes and torn jeans and claim they are middle class. That doesn't jibe with the fact that such people have the OPTION of donning far more expensive clothing. Many others do not.

So if one starts contemplating the wisdom of reining in the excesses of the hogs, the first cry of "class warfare" is heard. It sounds good; we don't want any of that envy or Bolshevik stuff in our country. No, in America we're all in this together, right? With grim humor I listen to statistics being poured forth about how the top 1% pays more than the bottom 50% in taxes; how the so-called "rich" (no one in America is rich, you know, just middle class) are being burdened with the greater cost of ensuring our government works.

Okay, the government works, but for whom? And is it rude to ask what percentage of the top 1% of income earners in the U.S. are represented in Afghanistan or Iraq? An economist can explain, in cold economic terms, that those less well-off who perish in military ventures are quickly replaced by a constantly expanding population. Not so with the rich; they are of a magic world where sacrifice is only financial and isn't money all that matters in the end?

That's why I wouldn't make a good economist: financial matters affect everyone, but not equally. I'd have to make a living justifying the ever-increasing appetites of the hogs. The institutions that require cold justification for their existence depend upon constantly concurring opinions.

In any complex interaction between humans, there is always a keystone; that one thing that holds everything else in place. From time to time that keystone is nudged, and sometimes it's knocked out completely. It's happened before and will happen again because in the blind and self-justified pursuit of wealth accumulation the whole damned thing collapses.

There is not one economist alive today who could truly understand the old French saying, "The castle is safe as long as the cottage is happy." Right now the cottages have cable, they have baubles to distract from the boring yet critical decisions being made without their knowledge or consent.

There is an economic Bedford Forrest out there, unrecognized by the elite. Whatever form that phenomenon takes, it will perform the same function of that brilliant soldier. "Keep the skeer on 'em" was one of his tactics. Once the "skeer" starts it is amazing how a group of financiers convert themselves into a herd of panicked cattle.

No economist will stop the stampede; they can only explain it (again). It will require a political personage, one able to command the attention and respect of everyone.

We haven't had anyone like that in a long time, and we certainly don't have anyone like that right now.

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Cross-posted at Michael Linn Jones.com

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