We’re asking for your support to help crowd-fund a purpose-built spacecraft.
We haven’t gotten around to making a page on StartJoin yet, but it’s coming.
Why, you ask? Because after reading Paul Krugman’s editorial defending Fed policies last week, we have become intensely interested in visiting his planet.
So if you’re ready to hear our “pitch”, please sit back, get comfortable and prepare to open your mind. Because what comes next will require you to abandon everything that you understand about Earth, economics and perhaps rational thought itself.
We bring you, Paul Krugman’s “Who Wants a Depression?” editorial from the pages of the New York Times:
First, about that title: “Who Wants a Depression?” The vast-differences between Earth and Paul’s home planet are immediately apparent. Here on Earth, such ‘stimulate or you’ll be sorry’ threats are typically made by bankers and their Washington puppets as they demand more money from public coffers in order to prevent “a depression”. We are not accustomed to hearing supposedly populist economists lead off with the very same scare tactics employed by the banking cartels. Left is right. Right is left. We are already terrified by this weird new world.
Let’s move on:
I’ve written a number of times about the phenomenon of “sadomonetarism,” the constant demand that the Federal Reserve and other central banks stop trying to boost employment and raise interest rates instead, regardless of circumstances. I’ve suggested that the persistence of this phenomenon has a lot to do with ideology, which, in turn, has a lot to do with class interests. And I still think that’s true.
But I now think that class interests also operate through a cruder, more direct channel. Quite simply, easy-money policies, while they may help the economy as a whole, are directly detrimental to people who get a lot of their income from bonds and other interest-paying assets — and this mainly means the very wealthy, in particular the top 0.01 percent.
See Paul, on the planet we live on, the wealthy have actually never been this wealthy. They’re the ones pushing for continued low rates. Here on Earth, low rates have caused an increase in the wealth of the 1% that is historically unprecedented. Which is why they’re the ones cheering for ever more dovish Fed policy. But on your planet, it appears to be the opposite. The wealthy on your world are apparently out in the streets clamoring for less stimulus. Our minds reel.
[ Note to the crowd-funding team: Please budget a Go-Pro attached to the exterior hull so we can get some shots of bankers clamoring for less stimulus. ]
The story so far: For more than five years, the Fed has faced harsh criticism from a coalition of economists, pundits, politicians and financial-industry moguls warning that it is “debasing the dollar” and setting the stage for runaway inflation. You might have thought that the continuing failure of the predicted inflation to materialize would cause at least a few second thoughts, but you’d be wrong. Some of the critics have come up with new rationales for unchanging policy demands — it’s about inflation! no, it’s about financial stability! — but most have simply continued to repeat the same warnings.
Who are these always-wrong, never-in-doubt critics? With no exceptions I can think of, they come from the right side of the political spectrum. But why should right-wing sentiments go hand in hand with inflation paranoia? One answer is that using monetary policy to fight slumps is a form of government activism. And conservatives don’t want to legitimize the notion that government action can ever have positive effects, because once you start down that path you might end up endorsing things like government-guaranteed health insurance.
This too marks a striking difference to our world. Here on Earth, the price of food, education, healthcare and housing have soared. But on his home planet this is apparently not the case. We almost feel sorry for the economists on his world who predicted price-rises in the aforementioned sectors, only to be proven wrong. Their logic appears unflawed to us. But alas, we are using paltry Earth-logic.
Let’s explore further:
The rich are even more likely than most people to believe that what’s good for them is good for America — and their wealth and the influence it buys ensure that there are always plenty of supposed experts eager to find justifications for this attitude.
Well it’s weird enough that the rich on his world want higher rates. But now we’re supposed to believe that the super-rich on his world are more locally invested? We almost think he’s pulling our leg. So just so we have this straight: The rich on his world are apparently less diversified off-shore, and are more interested in the local economy? A dynamic which forces us to raise the prospect of the truly bizarre – does this mean the poor on his planet have accounts in the Cayman’s, Channel Islands and Singapore? Imagine a world where the rich are more patriotic and the poor see themselves as globalists. Do the poor protect themselves from inflation better? Are the poor on his world paid inflation adjusted salaries? We cannot wait to behold this planet with our own eyes. Please people, cough up a buck or two. We need this spaceship. We shudder to think of what he’s going to reveal next: Is he going to tell us that on his planet the wealthy lose more money than everyone else?
Oh wait, he goes there:
The really big losers from low interest rates are the truly wealthy — not even the 1 percent, but the 0.1 percent or even the 0.01 percent.
We feel our minds going numb. Perhaps we’re not yet ready to contemplate realities so cosmically separated from our own. But we must press on in the name of science.