We’ve just got some random thoughts today due to our inability to think clearly on any one topic. It seems like everywhere we turn, a sledgehammer of absurdity hits us right in the face.
Take the circus that is currently in town — national politics. What an embarrassment to the people of this country. As much as we try to ignore the situation, the political farce smears itself all over us. Slipper, Gillard, Abbot and all the rest of them…all completely unfit to represent this country.
On Lateline last night we watched host Tony Jones waste about 20 minutes of everyone’s time interviewing the world’s best treasurer, Wayne Swan. Swan ignored just about every question, his responses were an insult to Jones and the people WHO PAY THIS MAN’S WAGE — the Australian taxpayer.
Right then and there we thought of starting a political party called ‘Answer the Question’. We pictured ourselves in parliament (after presumably getting enough votes) interjecting into some long-winded non-answer by some windbag by standing up and saying, ‘excuse me ‘honourable’ member for blah (and we would do the quotation marks with our fingers too, as a mocking reference to the word honourable) could you please just answer the question?’
But we would never do it. For a start we’re too lazy. And the thought of expending all our energy on telling other people what to do via a political process makes us feel ill. Although strictly speaking the aim would be to just tell other people (politicians) to stop talking gibberish and do their job.
But we all know that’s not going to happen. Put simply, we have a bunch of narcissists (or a particularly disreputable bunch of narcissists) running the country, trying to mould society into something that befits their own view of the world.
It’s true that politics has never really been any different. But we doubt that politicians have ever shown so much disdain and disrespect for their office and for the people who vote them in and pay their wages. They are a disgrace and, if they had any shame, would be a-shamed. Clearly they don’t.
The best strategy for dealing with these narcissists is to ignore them completely. Don’t interview them, don’t mock them (The Chaser) don’t write about them (the Markets and Money) and don’t vote for them (everyone).
What else is going on?
Well, we think Shane Warne’s escaped from Madame Tussauds. See page 13 of today’s Australian Financial Review for the indisputable evidence. Where’s the real Warney? There are conflicting reports of him spending time in the nets in St Kilda, and approaching bayside walkers in Melbourne trying to flog his Brighton home for more than $10 million.
Okay, just one more thought on the deep bear market in Australia’s political stocks. It’s not just us. It’s a global phenomenon. Easy money leads to low standards. Anyone can get a loan and anyone can get into politics. Easy money tends to suspend the natural laws of the market, for whatever market it might be.
Dylan Grice, who spoke at our After America conference in March, recently sent us one of his Popular Delusions reports.
‘At its most fundamental level, economic activity is no more than an exchange between strangers. It depends, therefore, on a degree of trust between strangers. Since money is the agent of exchange, it is the agent of trust. Debasing money therefore debases trust. History is replete with Great Disorders in which social cohesion has been undermined by currency debasements. The multi-decade credit inflation can now be seen to have had similarly corrosive effects. Yet central banks continue down the same route. The writing I on the wall. Further debasement of money will cause further debasement of society. I fear a Great Disorder.’
A key element to social disorder is the lack of political leadership. By that we mean intelligent leaders who promote freedom of association, exchange, the rule of law, private property and all that sort of stuff. Not strong-arm fascist leaders who muscle their way into power because of the very lack of an intelligent leader in the first place.
Dylan also included a great quote from John Maynard Keynes, the bloke who has unfortunately lent his name to the policies of the absurd. Today’s Keynesian thinks you can spend (inflate) your way to prosperity. Here’s what the real Keynes thought, in 1921:
‘By a continuing process of inflation, Governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some … Those to whom the system brings windfalls … Become “profiteers” who are the object of the hatred … the process of wealth-getting degenerates into a gamble and a lottery … Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.’
If we asked Wayne Swan what he thought of that statement, we’re guessing he wouldn’t answer the question. That’s because modern day Keynesians don’t understand the original Keynesian. Which is just the start of their problems.
They just like to spend money to keep the economy ticking over. And they like central banks to lower interest rates to ‘spur demand’. Swan thinks Australia avoided the global crisis, largely because of his expert economic policies. But government spending, along with the China boom (itself a result of China’s attempts to avoid the crisis) simply delayed its arrival.
This is the big mistake modern Keynesians make. They think you can avoid a crisis by spending more. But it simply delays the inevitable adjustment. The longer the delay, the worse the adjustment will be.
for Markets and Money
From the Archives…
Derivatives as a Sponge
5-10-2012 – Greg Canavan
Don’t Teach Your Man to Fish
4-10-2012 – Nick Hubble
Three Phone Calls You Must Make Now
3-10-2012 – Nick Hubble
Beer and Tax in Retirement
2-10-2012 – Nick Hubble
Hard Times for Hard Rocks
1-10-2012 – Dan Denning