Monday, July 11, 2011
Unemployment goes up again and the media is surprised?
To me it’s incredible that the media continues to be surprised by any of this, the argument between Keynesian and Hayekian economic models has been going on forever, and time and time again history shows us when we follow John Maynard Keynes the economy suffers from near total collapse followed by stagflation, when we follow the route proposed by FA Hayek and other contemporary Conservative or Libertarian economists (Ludwig Von Mises, Hans Herman Hoppe, Milton Freidman, etc) things get better. The lesson we should have been able to take from the experience of the Great Depression is that you cannot spend your way into prosperity.
The federal reserve then needs to scoop up superfluous monies and destroy them which will increase scarcity and therefore the value of the dollar. As the value of the dollar goes up the price of oil, food and other basic necessities go down.
Now you of course will say, “yeah but my wages will go down too,” a simple fact of the matter is that wages have been either stagnate or falling anyway. Many people are loosing high paying jobs to end up at McDonalds, so no, it won’t happen that way by virtue of the fact that your wages are not keeping up with inflation. If the inflation we have been experiencing hasn’t moved our wages upward a Market Correction won’t move them downward. Odds are our wages stay the same, but the cost of living gets cheaper. Would that really be so bad?
With the cost of living cheaper people will have more money to deal with their bills, once their debts are paid they can start spending and the 21st Century can experience a roaring twenties of its own. With the increase in spending jobs will start to come back and the problems we are facing will all but evaporate. That’s all there is to it. Calvin Coolidge and to a lesser degree Ronald Reagan have already proven this formula works, it should therefore be a surprise to no one that when you’re going in the opposite direction things are getting worse.