What if This is 1929 All Over Again

Back in 1929, and 1930, and 1931, and 1932, in the Great Depression, a bunch of banks failed every year. Peaking in 3,000 banks failing in 1932. And the Republicans just stood around and did nothing. Even with Andrew Mellon, banker, as Secretary of the Treasury, they did nothing. Mellon, whose father started the Mellon bank as T. Mellon & Co., was used to financial wipeouts, and learned from his father in the Long Depression that started in 1873 that you just ride these things out and make sure that your bank doesn't go under.

Of course, both the Long Depression of the 1870s and the Great Depression of the 1930s were both, in my view, a consequence of the deflation that followed the "resumption" of the Gold Standard after an inflationary war. Apparently the high-and-mighty in 1930 weren't reading Walter Bagehot and his commentary on the 1870s financial crash in Lombard Street. In which the central bank is the "lender of last resort" and prevents a collapse of credit. Oh well.

But now we seem to be in a market rout and the Federal Reserve is raising interest rates in a rather tardy response to the money printing of the last two COVID years.

And we have the Biden administration executing on the ruling-class faith that we are all going to die of climate change unless we stop using fossil fuels.

Back in the 1930s the American people sent the Republicans packing and elected New York princeling Franklin Delano Roosevelt and a very Democrat Congress. Of course, they were fools that mucked around with the economy for eight years as it continued to wallow in depression, and only got the economy back on track by preparing for a nice little world war.

Will history repeat itself, with Democrats flopping around as the economy goes to hell, as Republicans did at the start of the Great Depression? And will Republicans take Congress in a mega-midterm, as the Democrats did in 1930. And will a Republican sweep all before him in 2024 as FDR did in 1932.

We Don't Know. 

But I do think that the Democrats have a problem. We saw the problem in the early years of the Obama administration when its stimulus package was mainly devoted to shoveling money at Democratic constituencies and not getting the economy back on track.

And now the Democrats think that the proper economic policy after the COVID stoppage is to shovel money at climate change. Of course they do, because apart from anything else, it will benefit educated Democratic voters.

I do not think it likely that our Democratic friends will wake up one day and decide that their climate policies are an economic and political disaster. Humans, and especially progressives, are not like that. Even when their religious cult leads them into the wilderness they still believe, and they believe what their leaders tell them, that the fault is all those evil monsters.

But ordinary people and ordinary voters just want the economy to work, and if the Democrats can't or won't make it work then the voters will decide it is Time For A Change, and elect the other guys.

And say what you will about dumb Republicans, they do believe that the number one job of a national government is to get the economy on track so ordinary people -- that obey the law, go to work, and follow the rules -- can wive and thrive in this land we call America.

When M2 increases by 40 percent in Two Years...

 I just thought that I would check on the M2 money supply over at the St. Louis Fed's FRED database. Here's what I found.

On March 2, 2020 M2 was $15,493 billion. On March 8, 2021, M2 was $19,727 billion. On February 28, 2022, M2 was $21,712.

So in the year from the beginning of COVID to the start of the Biden administration M2 went up by 27 percent. In Year One of Biden M2 went up 9 percent.

So, President Biden and Nancy Pelosi (D-CA) and Chuck Schumer (D-NY) and all the ships at sea. What do you think will happen to prices in the wake of all that?

Just to give a little perspective, in March 2010, M2 was $8,599 billion. So M2 expanded by about 6 percent a year during the 2010s.

A decade of M2 increasing by about 6 percent a year gave us 2 percent inflation. What do you think that a year of 27 percent increase in M2 followed by a year of 9 percent increase in M2 will do to inflation?

That's 40 percent increase in money supply in two years.

I'd say we are looking at a couple of years of double-digit inflation.

Oh well. No big deal. Back to normal in a couple of years, no doubt.

Or not.

Politicians Don't Know Nothing About the Economy

President Biden this week is emitting some incredibly foolish things about inflation. Said he:

“They [Republicans] don’t want to solve inflation by lowering your costs,” Biden said at the White House. “They want to solve it by raising your taxes and lowering your income.”

He called inflation the nation's top economic challenge, blaming the twin challenges of a "once-in-a-century pandemic" and the war in Ukraine.

"I want every American to know that I’m taking inflation very seriously, and it’s my top domestic priority," Biden said.

 No doubt. Except that a wise leader would have been worrying about inflation a year ago; he wouldn't be playing catch-up and blaming the opposition a year later. 

In fact, of course, politicians are only interested in the economy if it's tanking and threatening their hold on power -- not to mention the supply of ready cash for distribution to their supporters.

There's no mystery about this, of course. Politicians, like tribal leaders down the ages, are there to defend the homeland against marauders. For that they need to commandeer all the resources of the community in the fight for life or death.

Other than that, the warrior leader is interested in co-opting possible rivals with gifts and manors. Or, for those rivals not amenable to gifts and manors, they are another enemy and must be defeated.

Now comes Steve Sailer wondering about the astonishing European imperialism starting in 1492. As he says:

European ships were showing up all over the world, trading, conquering, and spreading Eurasian diseases, building the wealth of Europe and depleting that of the rest of the world.

 Were they "depleting" the wealth of the rest of the world? Certainly they -- we -- destroyed the tribal cultures of the Americas. But with India and China they were trading. They traded with India so that they could avoid the taxes and add-ons from the overland Silk Road and the spice route, with principalities taking their cut all along the way. China? Something about the price of tea in China and those jolly clipper ships that sailed down the Roaring Forties round Cape Horn and back to Europe.

But the question is: how could the Brits come to dominate India and mess around with China? These two civilizations should have been able to handle any amount of pimply European nobodies and their ocean-going sailing ships.

Maybe, says Sailer, it was the Mongols who conquered pretty well everything from Eastern Europe to northern India to the whole of China.

Maybe the Mongols caused places they’d invaded to get more reactionary? Russia, Islam, China, and India all seemed to lose momentum at inventing new stuff after they got out from under the Mongols or subsequent Asian nomad invaders.

Or maybe the Europeans sailors and merchants were operating under a new kind of economic-financial culture that ran rings around the Asians. In their age they were a rising class of bourgeois merchants and nobody adventurers. In our day with have a rising class of the credentialed educated class.

It makes sense when you think about our august rulers and the clueless way they have handled COVID & Co.

I mean, if I were president I would have been scared to death that the money printing and free-stuff distribution would have messed up the economy something fierce. So I would have figured that unless I got the economy back to normal in six months flat I would be facing a wipe-out in my first midterms. I would have put the experts to work figuring out how and why the Morgenthaus and the Harry Dexter Whites got u out of World War II without an economic meltdown.

Instead we have had a year of pedal-to-the-metal spending and low interest rates. The Fed was saying, hey, the inflation is transitory -- whaat? after you had doubled the monetary base in two years? Not to mention increasing it by 8 times since the 2008 crash?

Can you spell Clue Less?

And now I read that the Fed is proposing to raise interest rates at 0.75% per increment. 

Hoo boy, that will be fun.

All I can say is that, for the "next regime" I want a government that has half a clue on the economy and letting ordinary people live their ordinary lives without having to deal with the consequences of political stupidity every few years.

Civilizing Social Media: Try these Three Simple Tricks

I expect you think, like me, that social media is ungovernable, an automatic descent into hate and bigotry unless wise content managers beat back the baddies. And now Elon Musk is opening up Twitter! The Horror!

But the Zman says otherwise. Back in the day, he writes, social media kept the nasties under control. Not any more.

Most of the complaining, however, is coming from the sorts of people the internet used to exclude. Online culture used to be a haven from the scolds and busybodies who haunt daily life.

In ordinary life, he says, we are pretty good at marginalizing the nasties.

In daily life, no one likes the woman who is always creating drama. People organize their lives to limit their exposure to that person and anyone who enjoys her drama. Further, the guy who keeps talking about Hitler or how much he hates the left gets ignored. They keep this stuff to themselves so they can be included in the community. Social pressure works.

Wat?

First, he says, you need to remove mechanisms for scolds and busybodies to cause trouble.

Removing all of the mechanism to report other users takes away the appeal to the scolds and busybodies. If they are stripped of their ability to rat out fellow users, most of the fun of the platform goes away for them, as well as the people who enjoy taunting them. 

Second, how you deal with the bad actors? Simple. Down-voting.

Similarly, down-voting is a powerful weapon against troublemakers. No one likes to be told they are the problem. It is why booing at public events remains popular. It works, and the down vote works the same way. The reason YouTube removed down-voting is they hated being booed by their own user base. Social pressure is the best way to compel conformity in a community,

Really? I had no idea. What civilizes users is that they get "reputation scores based on the up votes and down votes."

Thirdly, whatabout moderators?

Another lesson from the golden age of the internet is that the sorts of people who want to be moderators are the people who should never be moderators. It is the scolds and busybodies who lust for these positions. The Trust and Safety committee of Twitter is composed of the worst, most petty despots humanity can produce. The platform would improve greatly if Musk just threw these people off the roof of the building.

 Again. I had no idea! You mean that Twitter is actually designed to be a sh*t show?

The main thing is to

select against the scolds and busybodies who make life miserable for everyone. A reorienting of the moral hierarchy that places these people at the bottom, rather than the top, not only fixes Twitter, but sets a positive example for the rest of the public platforms.

And to think that all these problems had already been solved, and I didn't know. Until Twitter came along and unsolved them, because, I suppose, the left wants to reward scolds and busybodies. As long as they are approved lefty activists, of course,

Really, I am kinda shocked by this. I had no idea that with a few simple tricks we can solve the social media problem and everyone can get back to wiving and thriving.

Where Next for the World?

Today Theodore Dalrymple wonders why on Earth we are wedded to the news, when it's almost all bad, and we can't do anything about it anyway.

And I wonder why on Earth the pro-choice mostly peaceful protesters are so enraged about the possibility of reversing Roe v. Wade when all it will do is return abortion lawmaking to the states, and if you are a nice liberal lady your blue state will almost certainly keep abortion legal up to and including the moment of birth.

And a chap at the British Spiked wonders why the Brit Labour Party can't shed it's fashionably lefty identity politics -- especially around trans issues -- and recapture the working class that has drifted away from loyalty to Labour.

And I wonder about rich-kid lefty Kathy Boudin, raised in Greenwich Village among lefties, a Bryn Mawr graduate who protested against the black maids at college being underpaid, and then went on to be an accomplice to an armed robbery in which three guards were killed. Here's a quote about Boudin:

“One thing about that kind of background is that even if you’re converted to belief in social transformation and you’re against upper-class privilege, it’s real hard to overcome your deep training as a member of that class that you have the right to run the world.”

See, I think it is odd that while 500 years ago warrior landowners knew they had a right to run the world, today it is educated activists that know they have a right to run the world. How does that work?

Meanwhile my congerscritter Pramila Jayapal (N-WA) is all a-twitter about forgiving college debt to the privileged while the stock market is going down the toilet now that the Fed has -- finally -- decided to Do Something about double-digit inflation. Where were you, a year ago, Rep. Jayapal, when a wise head would have been saying that maybe now is not the time for super-mega-blowout spending bills.

And now I read that the Biden White House is bragging about helping the Ukrainians sink a Russki ship, killing Russki generals, To say nothing of Nancy Pelosi going to Ukraine to promise additional support.

Hey, President Biden! I got four grandsons that are at or close to military age, and I don't think that your stumbling efforts in eastern Europe add up to a reason to send them to... Yeah, exactly what are we trying to do in Ukraine?

Meanwhile, Jan Psaki is quitting as presidential Press Secretary, to be replaced by Karine Jean-Pierre, the first black and "out LBGTQ person" to serve in that role.

Somehow, I get the feeling that the world is out of joint, and it ain't gonna get back in joint for a while.

Tony Blair's Poltical Revolution in Britain: What Can We Yanks Learn From It?

Officially, the Brits sneer at Tony Blair, the guy that rescued Britain's Labour Party from left-wing lunacy. For a while. But Mick Hume reminds us, on the 25th anniversary of Blair's win in 1997, that Blair reordered Britain's approach to government.

New Labour firmly believed in changing how people lived their lives, and regulating human behaviour. It would be the central new role of government to discourage bad habits, interfering in everything from what we should eat and drink to what we were allowed to say and think.

Back in 1997 Hume was editor of LM Magazine (LM = Living Marxism) and his reaction to Blair's win was:

The Tony Blair Commandments: Thou Shalt Not smoke, drink or eat what you like; have a gun, a knife or a wild sex life; watch, read or download what you want; bring up your children as you see best; use what words, gestures or jokes you choose; or in any other way think for yourself.

In other words, Blair "accelerated a shift in power from elected to unelected and unaccountable institutions", administrative, regulatory, supervisory institutions that continually butt into our daily lives. And the Brit elite is just as eager to police the internet as our noble rulers here in the US.

Mick Hume, a lefty, finishes up with  a plea to "put personal freedom and popular democracy back at the heart of British politics." Doesn't sound all that different from Trumpism, that our President Biden just anathematized:

This MAGA crowd is really the most extreme political organization that’s existed in American history. Recent American history.

Only, I'd say, as the president implies indirectly, the "MAGA crowd" isn't really an organization at all. It is the cultural-political aura around former President Trump. It is inchoate, organic, supported by ordinary middle class people and nobody in the ruling class really knows what to do about it.

It's interesting to note how Britain and the US tend to echo each other. In the Eighties we had Reagan and the Brits had Thatcher. Both were saying that the old economic regime wasn't working. In the Nineties we had Clinton and the Brits had Blair. Both were saying that the old working-class politics of the mid 20th century didn't play any more. And both proposed the rule of the educated class as wise counselors -- combining, I would say, political power and religious belief. In the 2010s we had Trump and they had Brexit, in which the ordinary middle class rebelled peacefully against its betters.

The simple thing to say is that both the US and UK are experiencing the Woke Meltdown. I think I saw a cartoon recently that showed Elon Musk as Dorothy throwing water on the Wicked Witch of the West who is crying "I'm Melting."

But then what?

One thing that's important. I don't think that the "MAGA crowd," as extreme as it doubtless is, wants to burn the place down. And that might make the Great Rebellion relatively peaceful.

Liberal Democracy and the Enemy

The Zman has a couple of posts on the curious aggressiveness of "liberal democracy." 

In "Expansionist Ideology" he notes that everyone agrees that fascism is expansionary, but wow, it wasn't in Franco's Spain and Salazar's Portugal. Communism was explicitly expansionist, of course. We all know that too. He notes that

communism cannot exist without some new ground to conquer, while fascism is at least capable of operating within national boundaries as a good neighbor.

Whatabout "liberal democracies?" Well, everyone agrees that 

democracies do not go to war with one another... Liberal democracies are dragged into conflict by illiberal systems that only understand force.

Except that 

The United States, the epicenter of liberal democracy, has been at war for over a century. In fact, the reason for the past tense when speaking of fascism and communism is the United States conquered these two systems in the name of liberal democracy.

So what gives?

Fascism was a revolt against modernity. Communism was a revolt against the past. Liberal democracy is a revolt against nature, specifically the natural limits of the human animal.

So, after liberal democracy defeated fascism it went on to defeat communism. "Once communism was defeated, it declared war on the world."

What exactly is our beef with Russia over Ukraine? Good question. And with China over Taiwan? You tell me. So, the Zman says, liberal democracy is the worst.

The limited expansionism of fascism triggered a war in Europe then world war. The explicit expansionism of communism plunged the world into a forty year cold war. The hyper-violent, revolutionary expansionism of liberal democracy now promises something far worse.

He's got a point. 

In "The Violence of Democracy" the Zman reviews the history of democracy, from Athens and the Peloponnesian war to the French Revolution to the United States that was created in war and then had the War of 1812, the Civil War, then war with Spain, then Europe, then Communism, then the Muslims, and now a cold war -- possibly becoming hot -- with Russia.

And why would we be going to war with Russia, "an important part of the global supply chain for things like energy, food and raw materials." Or China, "the manufacturer of many Western goods?"

You tell me.

Of course, the answer is obvious. Curtis Yarvin: "there is no politics without an enemy." Our liberal friends believe that politics is the royal road to justice. But if Yarvin is right then politics, whether or not it is bending towards justice, is always a fight against an enemy.

If politics is a fight against an enemy, then it is always war. That is what it does.

Do you see the problem here? As I like to say, politics makes complete sense when humans are fighting over food-yielding land, in an age when food-yielding land is everything. But in our present industrial, or post-industrial, era when everything is for sale on the market, and can be resolved by buying and selling, and the best land for food is not necessarily a matter of life and death? Maybe we don't need politics.

Now I would say that if you look over the last century in the US, you get the feeling that our Democratic friends are always spoiling for a fight. And Republicans are not. No wars in the Republican 1920s. Winding down the Korean War in the 1950s. Winning the Cold War without a fight in the 1980s. Oh yes: Bush and Iraq. But then no new wars on Trump's watch. But Ukraine on Biden's watch.

And, of course, our liberal friends are always looking for a fight in domestic politics. With the current likelihood that the Supreme Court is going to send abortion back to the states, our liberal friends are rending their garments and threatening to end the filibuster, jam abortion through Congress, and expand the Supreme Court, and I know not what.

Which makes the Zman's point. If our liberal friends can't get their way, they will drive over the rules.so they can get what they want anyway. And a bunch of wags are noting that liberals are suddenly talking about "women's rights" and forget "birthing person;" "child" instead of "foetus." When you are angry you forget your artful circumlocutions.

I say that the Age of Politics, that I define as the era of the rule of the educated class, is in its autumn. We really don't need politics, because we have better ways of resolving our differences, as proposed by lefty Jürgen Habermas.

Thus, for Habermas, humans are not merely rational actors pursuing their strategic ends through the use of instrumental reason, as the Enlightenment and his teacher Theodor Adorno supposed. They also live in community in the world with other humans with whom they communicate and develop moral agreement. If the rational system of the Enlightenment and its instrumental reason is indeed strategic, a mechanical system that deals only in power and domination, it is only part of the truth. Humans also dwell in a lifeworld of shared cultural tradition. 

Notice that our liberal friends do not accept the idea of living in a "lifeworld of shared cultural tradition" and developing moral agreement with eevil racist-sexist-homophobe white supremacists. Because the Other are the enemy. The idea that liberals share a cultural tradition with the eevil racist-sexist-homophobe white supremacists is anathema to our liberal friends. They will define morality, and we will go along.

Now it is my belief that the ordinary American middle class is really not that into politics, unless jabbed with a stick. On my reductive Three Peoples theory, the middle class is a class of Responsibles that live by obeying the law, going to work, and following the rules.

An it is my belief that the rise of populist nationalism, here and elsewhere, is a response to the ordinary middle class being jabbed with a stick by the educated class, all over the world.

So, either the ordinary middle class, in nation after nation, will put an end to the Age of Politics run by our educated liberal friends, or we won't.

Stay tuned for next week's exciting episode.