As usual, people are in a panic this week over economics and finance when the solution, the Economic Democracy Act, is staring them right in the face. We know we’ve been saying this for years, but you never know when someone might start paying attention:
• More Than Counterintuitive. It cannot be denied that at first glance the tactics of the Federal Reserve appear to be a trifle counterintuitive. Within the prevailing Currency Principle paradigm, “interest,” instead of being a lender’s just share of profits from a productive endeavor, is the “price of money” for any loan, productive or otherwise. The idea behind the Keynesian tactic of increasing the price of money — raising interest rates — is that increasing the price of a key input to production (money and credit) raises the price level and reduces demand . . . demand having previously been increased by lowering interest rates and creating mega-tons of moolah backed by government debt. In economists’ language, the Federal Reserve is attempting to offset demand-pull inflation with cost-push inflation, fighting fire with fire. Of course, all that really happens is that people are squeezed by the rising price level both ways, the cure being the same as the disease. What’s the solution? We suggest the Economic Democracy Act.
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| "My prescription is 'Don't do that'." |
• The Proper Cure for Inflation. As the old vaudeville joke has it, a patient goes to the doctor and says, “Doctor, it hurts when I do this.” The doctor says, “Then don’t do it.” Moderately humorous — but true. In the previous item, we noted that the Federal Reserve is attempting to counter one type of inflation with another type of inflation. Unfortunately, by doing that they kick off “stagflation”: rising prices, less money, and less, zero, or negative growth. The real cure for demand-pull inflation (too much money), however, is not to impose cost-push inflation (increased cost of inputs), but to understand money in the first place. Money and credit are not a commodity with a price, but a means of measuring value and determining prices, as Louis Kelso pointed out. If the currency had a fixed standard (redundant to a binary economist, an oxymoron to a Keynesian), and all money creation was linked by private property to things with real value (the so-called “real bills doctrine”), there would be no demand-pull inflation, and cost-push inflation would be natural, occurring only when there was an actual, and not artificial decrease in supply or increase in cost. What’s the solution? We suggest the Economic Democracy Act.
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| Is this the "Disinflationary wave"? |
• Disinflationary Wave Coming? Once upon a time, “depression” used to be the scary word. Now it’s “recession.” Same thing, but a different word to keep people from getting scared . . . which ultimately only ends up adding more fear and confusion. Similarly, the scare word in monetary policy was “deflation” and a lowering of the price level. Now deflation is being replaced with “disinflation” and a lowering of the price level. Same thing, different scare word. We are now being warned that a “disinflationary wave is coming.” What that means is that people who make money from having too much money in the economy are worried that the people who make money from there being not enough money in the economy might be winning. The idea that maybe we should have exactly the right amount of money doesn’t seem to occur to anyone. Not to beat a dead economy, but we suggest the Economic Democracy Act.
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| The Old Lady of Threadneedle Street |
• Bank of England Raises Rates. If you thought only the Federal Reserve was in a Keynesian Looking-Glass Land, you haven’t been watching the news. The Bank of England, the first true central bank in the world (which, in common with all the others, has become a de facto fourth branch of government) is raising interest rates. Why? To dampen inflation, of course. And why is there inflation? Because the Bank of England created too much money backed by government debt. In other words, having caused the problem, the Bank of England (evidently intent upon muddling through to disaster) is attempting to solve the problem by making it worse. Not surprisingly, there is a more common-sense solution. We suggest the Economic Democracy Act.
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| "Looks like the Dow went down again . . ." |
• Dow Dips Below Thirty. Edgar Rice Burroughs, the creator of Tarzan, once wrote a very obscure book titled Beyond Thirty. No, it was not about growing old in America, but a type of “future war” story set in the period after World War I had destroyed all of Europe, with the Americas escaping after having cut all communication with Europe, Asia, and Africa. It is illegal to go “Beyond 30” (degrees longitude), but a flying submarine has a mutiny, which sets the stage for a typical Burroughs thriller. What brought this to mind was the fact that the Dow has for some time gone “Beyond 30” thousand . . . at a time when the global economy can hardly be said to be in any kind of good shape. If nothing else, the wide swings in the market should tell us something is drastically wrong. As of this writing, the Dow is down to 28,350 or thereabouts . . . and saying it’s down to that pretty much says it all. Is there a way, however, to change the stock market from a gambling casino to a useful social tool? Yes: We suggest the Economic Democracy Act.
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| "I had a different image in mind." |
• “The Party’s Over”? Occasionally even the superrich have glimmerings of intelligence . . . although they soon get over it. Currently “Billionaire Investor” (evidently a new order of nobility, at least in Walter Bagehot’s Peerage), Carl Icahn is warning us that printing too much money is taking the United States the way of ancient Rome. There are some similarities, yes, but there is also a ready-made solution that ancient Rome didn’t have: the Economic Democracy Act.
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| No good if nobody buys it. |
• Russia’s Capitalist Perfect Storm. Say’s Law of Markets assumes as a given that every producer is a consumer, and every consumer is a producer. If you want to consume something, you must first produce something, either for your own consumption directly, or to trade for what someone else has produced that you want to consume. What about charity or theft? Yes, that occurs, but as exceptions to the normal way an economy should be run. Socialism/communism tries to run an economy on charity (to each according to his need), although it ends up running it based on theft (to each according to his greed), while running an economy directly on theft ends up meaning that you take what others have produced and then try to sell it back to them. This is why capitalism is just a shortcut to socialism, because capitalists try to take without giving, and socialists try to give without having, both ending up having many consumers and few producers. When you combine the two in Hilaire Belloc’s Servile State, you end up with the same thing: too many consumers and too few producers, with consumers unable to purchase what the producers have in superabundance. As Jean-Baptiste Say noted in his first “letter” to the Reverend Thomas Malthus, “[I]n reality we do not buy articles of consumption with money, the circulating medium with which we pay for them. We must in the first instance have bought this money itself by the sale of our produce. . . . it is impossible for [anyone] to purchase any articles whatever, to a greater amount than those they have produced.” So, why is Russia experiencing a surfeit of wheat at a time when a global famine is on the horizon? Because they have destroyed other countries’ productive capacity, diverted production to war materials, and raised prices with money manipulation. Putin, a.k.a., “Vlad the Despoiler,” has managed to create the perfect capitalist storm by having immense amounts of produce to sell, and no one able to afford it. What’s the solution? We suggest getting rid of Putin and adopting the Economic Democracy Act.
• Greater Reset “Book Trailers”. We have produced two ninety-second “Book Trailers” for distribution (by whoever wants to distribute them), essentially a minute and a half commercials for The Greater Reset. There are two versions of the videos, one for “general audiences” and the other for “Catholic audiences”. Take your pick.
• The Greater Reset. CESJ’s new book by members of CESJ’s core group, The Greater Reset: Reclaiming Personal Sovereignty Under Natural Law is, of course, available from the publisher, TAN Books, an imprint of Saint Benedict Press, and has already gotten a top review on that website. It can also be obtained from Barnes and Noble, as well as Amazon, or by special order from your local “bricks and mortar” bookstore. The Greater Reset is the only book of which we’re aware on “the Great Reset” that presents an alternative instead of simply warning of the dangers inherent in a proposal that is contrary to natural law. It describes reality, rather than a Keynesian fantasy world. Please note that The Greater Reset is NOT a CESJ publication as such, and enquiries about quantity discounts and wholesale orders for resale must be sent to the publisher, Saint Benedict Press, NOT to CESJ.
• Help Joe Walk Again for Economic Justice. Just a reminder, if you haven’t already done so, to visit the GoFundMe campaign and consider making a contribution and spreading word out among your social media networks. It’s off to a good start, but it’s still just a start.
• Hortense and Her Whos. In case you’ve been wondering how you might advance the Just Third Way by introducing it to legislators at any and all levels of government, we’ve made it easy for you, with the “Hortense Hears Three Whos“ initiative. Visit the explanatory website, and consider downloading the postcard to send to people in government. Don’t worry if you think they won’t be open to it, as the postcard is intended to get them to open their eyes.
• Economic Personalism Landing Page. A landing page for CESJ’s latest publication, Economic Personalism: Property, Power and Justice for Every Person, has been created and can be accessed by clicking on this link. Everyone is encouraged to visit the page and send the link out to their networks.
• Economic Personalism. When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it. It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy. You can also download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., ten or more copies) at the wholesale price, send an email to publications@cesj.org for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Sensus Fidelium Videos, Update. CESJ’s series of videos for Sensus Fidelium are doing very well, with over 155,000 total views. The latest Sensus Fidelium video is “The Five Levers of Change.” The video is part of the series on the book, Economic Personalism. The latest completed series on “the Great Reset” can be found on the “Playlist” for the series. The previous series of sixteen videos on socialism is available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics. For “interfaith” presentations to a Catholic audience they’ve proved to be popular, edging up to 150,000 views to date. They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective. You can access the playlist for the entire series. The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human persons place in society.
• Shop online and support CESJ’s work! Did you know that by making your purchases through the Amazon Smile program, Amazon will make a contribution to CESJ? Here’s how: First, go to https://smile.amazon.com/. Next, sign in to your Amazon account. (If you don’t have an account with Amazon, you can create one by clicking on the tiny little link below the “Sign in using our secure server” button.) Once you have signed into your account, you need to select CESJ as your charity — and you have to be careful to do it exactly this way: in the space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice Arlington.” If you type anything else, you will either get no results or more than you want to sift through. Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice Arlington” into the space provided, hit “Select” — and you will be taken to the Amazon shopping site, all ready to go.
• Blog Readership. We have had visitors from 27 different countries and 34 states, provinces, and territories in the United States and Canada to this blog over the past week. Most visitors are from the United States, India, the United Kingdom, Australia, and Canada. The most popular postings this past week in descending order were “Social Justice, IV: The Characteristics of Social Justice,” “News from the Network, Vol. 15, No. 35,” “JTW Podcast: The Politics of Aristotle,” “Activism versus Leadership,” and “Wolves in Sheep’s Clothing.”
Those are the happenings for this week, at least those that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and well see that it gets into the next “issue.” Due to imprudent and intemperate language on the part of some commentators, we removed temptation and disabled comments.
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