Painting the Leaves

Our leaders truly are incredibly intelligent. When they see brown leaves, they simply paint them green.

Our doctors are often able to correctly diagnose thousands of different illness types. Plus, they know all the medications and procedures that are commonly prescribed to treat those maladies. They are incredibly bright. Point taken, it is marginally sad that most of them have no clue what actually really caused those diseases. Why else would they structurally medicate the hell out of their patients? But forgive them, they cannot all be a Herbert Shelton.

Our political leaders are keenly able to name the illnesses of modern society: economic depression, violence, illiteracy, poverty, disease. There is no end to their inventiveness when it comes to vomiting out new laws, rules, regulations, and public entities in a relentless effort for the government to control all the evils of the world. That, in itself, is a fantastic accomplishment. Sure, it is a smidgeon sad that they have no clue why their policies are not working. Why else would they be spending the taxpayers’ money on bailing out the banks? But go easy on them, they cannot all be a Ron Paul.

Our business leaders have taken MBA’s and know a thousand details about production planning, logistics, marketing, and human resource motivation programs. OK, it is somewhat sad that most of them only focus on short-term results and have no idea how to really build steadfast organizations that structurally build quality products and provide meaningful service. Why else would they keep discounting and brand extending their products to death? Yet keep in mind, they cannot all be a Steve Jobs or a Jack Trout.

Our economists are brilliant at naming, measuring and analyzing a plethora of economic variables such as GDPs, inflation rates, stock indices, earning reports, consumer leverage ratios, bond yields, and so on. Yes, obviously it is a tad sad that they keep thinking their centrally planned tinkering is stronger than the market. If not, why else do they continuously meddle with interest rates, money supplies, taxation, currency band widths, public spending, and all the other tools of the Keynesian bag of tricks? But relax a little please, they cannot all be a Ludwig von Mises.

Many trees have thousands of leaves. Sometimes, these leaves turn brown. Sometimes they fall. Nature can be cruel that way. Fortunately, in their infinite wisdom, our leaders do not accept that. They know better than going with nature. Fortunately also, they have studied leaf science and therefore know how to tape leaves to their twigs and paint them in - almost - natural looking hues. It does not exactly always work perfectly, but why wait for next spring if you may have green leaves year-round? Why nurture the roots with fertile soils, if a paint job is that much faster and cheaper? Our leaders are truly quite brilliant. To solve our issues, all we need is more painters.

Only the Market can fix the Market

In 2007, Western economies got hit by the American financial crisis and ensuing economic depression. Left wing politicians rushed in to point the finger at the greed of the bankers and the lack of regulation. Right wing politicians more or less agreed. They were all wrong.

There will always be greed. The trick is to get greed to work for you, not against you. In a free market, greed - like ego, pride and passion - is good. It works as the antioxidant of the economic body. It aids to guide the efficient distribution of resources and eats up the inefficiencies. The market uses the greed. No greedy businessman would ever tolerate wasting resources. And free market bankers would never get away with over-rewarding themselves with bonuses. They would lose their jobs, for either their employer would go bankrupt or their shareholders would force them out. That is what almost happened some years ago. It did not, for our governments bailed out the bankers and therewith awarded the overly greedy businessmen. That’s how you create bad greed. A truly free market would never tolerate inefficient behavior. In any other kind of market, greed becomes another growth killing variable. A free radical that feeds on risky behavior that will always go unpunished.

We really do not need more regulation. Simply study the rules and regulations, as well as the number of overseeing entities, financial corporations had to deal with just before 2007. A sheer avalanche it was, already back then. But it did not work. It did not weed out the greed and it did not stop banks from making some critically wrong decisions. So now more regulation is going to work the magic, right? Wrong. Greed and mistakes will always be there. It’s human. To think you can regulate that away is a fallacy of the highest order. They tried this, in vain, in communist, fascist, and socialist regimes. Sadly, it is a concept that is still entertained by the elitists who think that a select group of wise people should decide for everybody else. This, while history has proven that no amount of regulation is going to fix the market. Only the market can fix the market.  

What really caused the financial crisis is sustained government intervention. The powers-that-were spent like mad, kept increasing bureaucracy and taxes, subsidized some industries, forced low interest mortgage programs on the market, and - worst of all - regulated the markets through inept central banking systems that pushed interest rates to artificially low levels and printed money out of thin air. But they have not learnt one thing. Now, in order to ward off a double dip, the powers-that-be have been prescribing the same medicine, but with upped dosages. That’s like smoking more cigarettes in order to cure your lung cancer. Maybe it’s time to just quit smoking.