THEY BROKE THE SOUL OF THE NATION: Keywords: Price controls, Obama, Kamala Harris, Bidenomics, New Economics, Keynesianism, Marxism, Hernando De Soto, boom and bust, the business cycle, Federal Reserve, inflation, social conflict, social anxiety, suicide.

 

The souls of America in the boiling cauldron of Bidenomics

THEY BROKE THE SOUL OF THE NATION

A meditation on the consequences of Obama-Biden-Harrisnomics by Xuan Quen Santos

“I believe the soul is the breath, the life and the essence of who we are. The soul is what makes us us. The soul of America is defined by the sacred proposition that all are created equal in the image of God. That all are entitled to be treated with decency, dignity and respect. That all deserve justice and a shot at lives of prosperity and consequence.”

"I believe America is at an inflection point, one of those moments that determine the shape of everything that's to come after. And now America must choose to move forward or to move backwards. To build a future or obsess about the past. To be a nation of hope and unity and optimism or a nation of fear ... and of darkness.”

"Now in our time—as we build an America that is more prosperous, free and just—that is the work of my presidency. A mission I believe in with my whole soul.”

Excerpt from speech by President Joe Robinette Biden

of September 1, 2022, Philadelphia

 

As the end of the Biden-Harris administration gets close, unemployment has begun to rise, and inflation has increased more than 20%; gasoline costs more than twice as much as when they took office and the cost of a mortgage for a median home has increased more than 321%. Violent riots and looting have burned intermittently during this period; crime is up in all major cities under their control. Two more international wars threaten to become World War III. The Department of Justice, the FBI and the IRS have been weaponized against political opponents, free speech has been curtailed with illegal associations with large media corporations. The decisions of the Supreme Court have been ignored… I believe they broke the soul of the nation. What do you think?

 

In an interview with a single working mother that aired on TV two days ago, she expressed how she feels. Tearing up, she said, “They are killing us without killing us. I am having to make tough decisions to feed my children”. How do you feel?

All Argentinians have been billionaires several times

The big new lie, and then a bigger one.

From 1850 to the present, the manipulation by politicians of the institutions of money, credit and interest rates, and foreign currency markets created a recurring series of economic booms and busts. They were characterized by inflation and recession, banking crises and high interest rates; they generated hyper-inflations, higher taxes to cover losses, higher foreign debts to disguise the burden, entire collapse of governments and nations, periods of political violence, revolutions and world wars, and the disappearance of multiple monetary systems. They always include confiscations of precious metals owned by We, The People. These errors of economic theory and policy have two sides. The academics responsible for these failures have covered them up with two lies. The first was new in 1848. They argued the recurring phenomenon is inherent in what the enemies of the free market labeled “capitalism”, and thus it was declared dead. A century later, they even came up with a scientific name for it: “the business cycle” as a permanent defect. Then came up a bigger lie. They labeled it New Economics as a solution: more intervention and manipulation, but with the aid of macroeconomic aggregates, intrusive statistics, econometric models, high-speed computers, and a new foreign language called FED Gobbledygook that only thousands of government experts claim to understand. They have been called out. Reality has already labeled those countries that have collapsed as “failed states”. The ones that are on the way are called “in decline”. The problem is that the theoretical errors and models of Keynes’ New Economics are embedded in the Laws. Defenders have labeled them as “quasi-constitutional”, suggesting they will not be changed easily and are almost sacred. Is the U. S. in decline? Is it too late to correct the course?

Nicaraguan Revolutionary Cordobas. Please notice the new values of 20,000 and 500,000 are just rubber stamped on top of the original denominations

The essence of New Economics and its long-term consequences.

On a separate path, economics as a science continued its autonomous search for the truth distancing from the positivists’ normative approach whose consequences we are living. It has won the academic race, but not the educational establishment. It has won the theoretical field, but not the support of the compromised policy-makers. It has not made a dent yet in correcting the “official history” of the Great Depression and FDR’s policies that deepened and prolonged it. It has yet to make an appearance in popular culture. The first step in initiating change is to unveil the truth about the theoretical error that Keynes launched as a “temporary” solution. Instead of disguising what it really means for the average citizen in many layers of Gobbledygook, here are the important points that can be understood by anybody with some common sense.

·         Keynesians begin with the premise that the market economy does not work, it never worked, and it is dead. Taken as their axiom, the logical foundation of their construct was taken as true without proof. That is, unless they accept failed Marxism as the death certificate.

·         Keynesians believe the government (temporary politicians and encrusted bureaucrats) knows how to make the economic machine perform at its best. The power of government must be used to direct the economy by inducing specific behaviors in unsuspecting and trusting people.

·         Keynesians believe that demand in the market (the power to buy) is the fuel that makes the machine operate. This is in direct opposition of what common sense dictates: we must work and produce first in order to get money. They believe that demand is represented by money, which is controlled by the government, and they are indifferent as to whether it is forged money, stolen money, earned money or just printed paper.

·         Keynesians believe “excessive saving” is dangerous for the economy unless it is for purposes such as retirement or education. In their view money sitting stagnant means less money in the economy stimulating demand. Spending is good, saving is bad. Buying is good, having cash in your wallet or in a piggy bank is bad. The way to control how much money people save for future consumption, or how much they spend consuming for instant satisfactions is by controlling the interest rates. The natural interest rates as a market price reflect the dynamic equilibrium of how free people value their most scarce resource: their time.

Hungary 100,000,000,000,000,000 pengo 1946
Hungarians must be the wealthiest people on the planet

·         Near zero interest rates for savers during the last 20 years have nurtured now two generations of kidlike adults that prefer instant gratification, have no savings, are heavily in debt, and have no idea how they got here. They now realize they cannot afford the American dream, nor pay for their expensive education; they refuse to do real work for eight hours a day, cheat by spending office time on TikTok, and want more paid vacations; they cannot afford personal relationships but have multiple subscriptions to streaming services. Their vision of the future has been so distorted by the manipulation Keynesian policies have done to their valuing time that they do not see a future worth living. Hysterical young women shout for free abortions and young couples choose to travel around the world instead of raising a family. This nihilist destruction of values explains why these two generations have been real suckers for the tormenting prophecy by government scientists that the end of the world is just five years away. Have you noticed how these two generations wear their mental issues on their sleeves, live in permanent cycles of depression and anxiety mixed with cocktails of every drug that allows them to avoid facing reality?

·         To control interest rates, the government must control the banks’ operations by owning them, regulating them or lending to them. Banks offer two key rates: rates it pays to people that save for a future plan, and rates it charges to users of credit who want to consume or invest now. To stimulate more demand (The boom cycle), they expand credit at low rates and depress the rates paid to savings. This view is one of Keynes’ proposals aimed at preventing recessions and deep depressions (The bust cycle). Loans are of two kinds: a) to finance consumption ahead of time, like car loans or credit cards, and b) to finance the capital needs of businesses, whether working capital or capital investment. Low rates on loans will invariably add to inflation in the consumer market and also mis-direct capital investment towards businesses that were not needed. In both cases, the entire system of production is receiving false signals with the increased demands. The mis-allocation of resources will invariably have a moment of reckoning that Keynesians call “a market correction”. From happy-go-lucky times we go to the doldrums. By altering how individuals freely exercise their time-preference, politicians led by the Keynesians are really taking over the future value of people’s lives. Interest rates are not just numbers.

·         To stimulate demand further, Keynesians believe government spending should be increased. This happens by lending funds to banks to make more loans; this invariably results in financing unfeasible projects and wasting scarce capital. Demand is also stimulated by increasing the payroll of the bureaucracy which adds demand, but not a single additional product or service in the economy. Government also creates “public investment” programs -usually public projects- that are contracted only to spend more money by generating jobs; and finally, it increases the free give-away programs of entitlements. It is easy to understand that few new products, if any, are produced as a consequence, but many new buyers are added.

Poland did not escape hyperinflations. This is a PM 10 million note

·         Government loan guarantees steer capital to economic activities that were not a priority under normal market conditions. The Biden-Harris Green New Deal and the Chips act favor specific groups of businesses and investors. Rarely do they succeed on their own and are a major source of “kickbacks” during elections, and into retirement. Have your heard of the revolving doors from government to industry? The subsidized industries are also a misallocation of resources that when the market undergoes a correction, they go bankrupt after wasting public money. Do you remember Obama’s Solindra bankruptcy scandal? This is also an indirect way for the government to take over directing the economic activity.

·         What about the idea of paying people not to work? Don’t you think this policy eventually leads to the promotion of indolence and it is really a waste of the only source of wealth creation which is peoples’ creativity? If you are being paid to do nothing with inflation money, don’t you think you are stealing from all your neighbors and relatives that work? What is happening to the world famous “American work ethic”?

·         What about price inflation? The accumulated inflation from the Biden-Harris term for three- and one-half years is now close to 20%. This is not the whole picture. They also raised the interest rates for first-time buyer home mortgages from 3.25% to 7.5%, which is an increase of 231%. In the first case, it means that one $ 1.00 of 2020 is worth now only seventy-five cents. It also means that to buy the same items that you could buy for one dollar, now you need $ 1.25. The first-time home buyer cannot do much other than wait for better times, hope to win the lottery, and continue living with parents.

·         Keynesians know that adding demand by simply manipulating credit and increasing public spending inevitably creates price inflation, although they deny it with many distractors. They can “pump money” into the economy by simply ordering the printing of more money. Nowadays, they do not even need to waste any paper and ink. They just rig the books of the FED and the Treasury and use EFTs. This type of money is called “fiat” currency or just paper money.

The socialist Weimar Republic DM 1,000,000 led the way for the ascent of Hitler

·         Fiat money is not backed by gold or silver, or any other commodity. The government mandates its use and restrics its alternatives. In 1971, President Richard Nixon suspended the US dollar convertibility to gold at one ounce for $ 35.00, turning the currency into paper money. By now, most monetary systems are “fiat money” or based on reserves of US dollars (fiat money). Nixon’s turn to New Economics was an attempt to cure the rampant inflation he inherited from President Johnson’s Vietnam War and free-for-all “War on Poverty” entitlement programs passed shortly before the election. In another desperate move, Nixon imposed harmful wage and price controls. The price of gold was freed and has risen close to $ 2,500 per ounce.

·         An ominous sign is that by 2024, the main rival countries of the U. S. have been hoarding gold reserves as they prepare to separate from the U. S. depreciated Biden-Harris paper money. Nixon’s Keynesian policies created a decade of stagflation. It was only “cured” by double-digit interest rates, causing the devastating 1981 recession. One step backward and two forward for controlling all people’s lives, but they still blame the “defective market forces”.

·         Since price inflation is inevitable when demand is artificially stimulated, it soon develops its own inertia. People complain about higher prices and push for increased salaries. Labor unions strike or negotiate for higher wages. Corporations begin to flounder or raise the prices on their products. Do you remember Obama-Biden’s Great Recession? The government regulates prices in a futile attempt to keep them low, and eventually establishes price controls. These generate scarcity and lines of buyers with quotas. Do you remember Jimmy Carter’s Stagflation? Government raises taxes to cover fiscal holes. Some key corporations are directly controlled or nationalized, like utilities and energy companies. Corporations and small businesses begin to close, and layoffs increase the rolls of the unemployed…etc. Do you remember the Great Depression of FDR? Are you experiencing now the Biden-Harris’ Great Inflation that will last until 2025 if there is a correction soon? What if there is no correction? What if the correction they will do is a nice, little recession?

Yellen in the FED during Obama-Biden, then in Treasury during Biden-Harris

She is the Queen of Bidenomics at 78, likes hallucinogenic mushrooms 

and has not been shopping in decades. She is a multimillionaire.

·         Somewhere along the process described in the preceding paragraphs, Keynesians realize they blew it again. It always happens since their “data” and indicators are from the past and events are racing towards the future. No one can know the future, but with our individual free choices we have a part in making it. Has the FED and the government taken this essential part of who you are? Have you noticed that you are less and less in control of the decisions that shape your future? Policy makers are always late to their own game and delaying your own.

·         What plans did you have five years ago that you cannot afford anymore? We, the People, catch on and begin to prepare: hoarding basic supplies, buying gold or silver, migrating, joining the underground economy, buying foreign currency, hiding grandma’s silver and jewels, buying an AR-15…etc. People try to get rid of the paper money they have since they know it is losing purchasing power by the minute. People buy whatever there is because tomorrow there will be none. Ask Venezuelans, Cubans, Nicaraguans, Argentinians, Bolivians, Turks, Hungarians…etc.

Global socialism uses eco-hysteria as a power grab

·         Inflations that have become a “push button” on the desks of central bankers and treasuries have devastating effects on identifiable segments of the population. As price inflation begins to rise, everyone that depends on fixed incomes begins to suffer. These include most retired seniors, but it also includes alimony and child support payments. If inflation persists or keeps increasing, pressures mount for COLAs, cost of living adjustments. Of course, inflation is the trigger for strikes and walkouts by the labor unions. Another group that suffers losses are merchants or real estate owners that have financed their customers at fixed rates. The value of all the future payments is dropping in purchasing value. They will be paid less value than what they lent. If inflation continues for a longer period, as many salaries will be adjusted by employers, the workers will find that their new income level has put them at a higher income tax bracket, and they will end up paying more than before in real terms. The tax collectors are the first to take advantage of rising prices. They will receive more revenue as prices soar without changing the rates. Properties are re-appraised, and owners will pay more for the same property and public services. If you own a restaurant, or need price-lists, inflation forces you to re-print or re-do frequently your menus and catalogs. Imagine what supermarkets and retailers have to go through with re-labeling and re-tagging all their merchandise. Electronic lists have solved this problem at a lower cost. If you know accounting, you understand that businesses that rotate inventory face the problem of pricing. This is known as the FIFO, LIFO and NIFO choices. If you do not use NIFO during a spiraling inflation you go broke very quickly. If the inflation rate is higher than the interest paid on savings, CDs, and dividends, you are losing the value of your investments and are getting poorer by the minute.

·         Mental health and civil court statistics show an indubitable fact. The Keynesian buttons of inflation, recession, and unemployment have a direct impact on the mental health of We, The People, and in the type of society we may have in the future. The stress and anxiety related to deteriorating economic conditions are a major cause of conflicts leading to divorce, separation, abandonment, and even abortion. They are also the cause of children´s being raised by single parents, grandparents, other family members, or low-cost daycare. These circumstances influence the stable and healthy development of children. Increasingly, families have become two- or three-income families to cope with stressed basic budgets. The number of children that become wards of the state is embarrassing. These same stresses affect the decisions to start new families. The age for marriage has been postponed by a decade in a century, fertility rates have dropped and there is even a new acronym….. Millennials and Gen Z are putting of having children because they are “too expensive. A new generation of DINK couples has arrived: Dual Income – No Kids. Imagine what kind of future will countries have under Keynesian controllers that produce DINKS who believe that capitalism will destroy the world in five years?

Greta Thunberg at UN pleading for capitalists to stop destroying the planet

An eco-hysterical adolescent that believes the Climate Change hoax

·         If Keynesians have enough time to apply the brakes, they begin to raise interest rates to slow the economy. This literally means “to provoke a recession”. The direct and immediate consequence is the rise in unemployment. Firing bureaucrats is not easy, so it usually means that productive workers will be the first to suffer the consequences. And then, there is seniority or mandatory retirement. Young and senior workers get fired first. While some get two jobs, others begin to burden themselves with expensive credit to finance immediate necessities. Business and personal bankruptcies begin; pawn shops increase their business, repo men thrive, foreclosures increase…etc. Before long, crime begins to grow in waves and there is a breakdown in law and order. Unless there is another timely reversal, soon the mobs are out in their “peaceful” acts of vandalism and destruction. Do you think is moral that a small group of un-elected manipulators of money and interest can wipe out in an instant the livelihoods of millions of families? What kind of chaos do they cause in the hearth of unsuspecting families? I was devastated listening to the interview of a lady describing how she has been affected by Bidenomics. As she broke down in tears, she said, “They are killing us without killing us. With my fixed income, I am having to make tough decisions about feeding my children.” There are many studies that confirm that during recessions the number of suicides increases in parallel to the business bankruptcies.

·         How secure is your job? It is not your boss’ fault if the government’s policy alters the market’s conditions and he has to reduce or close the business. It is your government that thinks producing inflations and recessions are good policies to play with. They play with your job, your income, your mortgage, your kid’s future, your savings and the value of the stocks in your 401K or IRA account. Did you give consent?

The price of one roll of toilet paper is two piles of
Venezuelan Revolutionary Bolivares

·         By manipulating money and interest rates, Keynesians degrade the economy and gradually destroy the wealth of We, The People, which they would call “the nation”. Total production eventually has a lesser value than what it costs to produce it. One example is that after years of having approved contracts to build a national network of EV charging stations, only twelve are built, each one at a cost of two billion dollars each. This is calculated by dividing the total approved spending into the actual units built. Cost overruns, delays, thievery, corruption, fraud and inferior quality are what accompanies “public investment” contracts.

·         By destroying the market prices, Keynesians throw all the allocations of scarce resources (human labor, human capital, natural, entrepreneurial, capital goods, and financial capital) into confusion and disarray. Wealth is inevitably destroyed and under-utilized. Market prices are the only source of information that people use to make decisions with their different time-preference, valuations, and personal objectives. This is a scientific finding confirmed by numerous studies of the World Bank, the IMF and the U. N. None were studying the U. S. economy which many believe is above the economic disorder you can observe in all socialist countries, failed states, or countries with a low score in the Economic Freedom Index of the World which is a characteristic of all under-developed countries (Developing? Third World?). What is the solution? Liberate the markets, stop the controls on capital flows and prices, have a stable currency, reduce the burden of state budgets, eliminate regulations and corruption, guarantee the security of contracts and property… Of course, although the WB, IMF and UN made the correct diagnosis, their solutions have always been to hire one of their Keynesian experts as consultants in order to fix the problem. That solution does not work. Either the market is free or is not. What these sewers of socialist has-beens recognize is that liberated economies have the potential to grow, just as a result of eliminating price distortions, between 1.5% and 3% per year. My friend Hernando De Soto’s books “The Other Path” (1986) and “The Mystery of Capital” (2000) demonstrate how poor, but free people around the world can rise above poverty if the burden of the economic direction of the public administration is lifted. From Lima’s Instituto Libertad y Democracia, De Soto’s initiatives are an alternative to the “more of the same” promoted by the international aid agencies. Have you noticed that the IMF and the WB always save the failed states? It is really to cover their fingerprints. Socialist led international bureaucracies saving and advising local socialist bureaucracies, usually with funds provided by the U. S. socialist bureaucracies. The informal economy is part of the underground economy, but even though it is declared illegal by abusive legislation, it is not immoral or contrary to what people would do in liberty if the laws were moral. The larger the informal economy, the bigger the public corruption.

"El Otro Sendero", a study of the free market
of poor people oppressed by bureaucrats

 Is the Soul of America broken?

 If President Biden had wanted to be honest about the American people’s soul, he could have plagiarized a famous phrase, just like he had done many times before. It comes from a famous socialist war reporter who had an epiphany after witnessing the realities of socialism in practice, the horrors of Leninism and Stalinism. His writings afterwards became masterpieces of the XX century literature (“1984” and “Animal Farm”).

  

“The soul of America is defined by the sacred proposition that all are created equal. What the American people have to understand is just that there are some of us that are more equal than the others.”