As has become usual, this week’s news items reflect the chaos of both Keynesian economics and contemporary politics. Naturally, we think the way to correct the situation is to adopt the Economic Democracy Act:
Sound economic advice?
• Avoiding Recession. As if Keynesian economics wasn’t enough by itself to confuse central banking by imposing a mandate to control inflation and keep employment high. You see, in Keynesian economics, there is an unavoidable tradeoff between inflation and employment: if inflation is high, unemployment is supposed to be low, and if inflation is low, unemployment is supposed to be high. Of course, this theory is based on Keynes’s incoherent (re)definition of inflation as a rise in the price level after reaching full employment. Now, however, to retain its purported independence in the face of President Trump’s takeover attempt, the Federal Reserve is attempting to keep inflation low and increase employment — an impossibility in Keynesian policy. As noted in an article in Fortune magazine, “Despite the enormous pressure Trump has put on the Fed to lower rates, even trying to fire Governor Lisa Cook, central bankers have largely resisted his calls so far. But the sudden deterioration in the job market has made a rate cut a virtual certainty.” Of course, raising interest rates to cut inflation is counterproductive because it raises the price level of doing business, only cutting inflation by reducing demand . . . which is the basis of all economic activity. What’s the way out of this paradox? Adopt the Economic Democracy Act.
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| Keynesian logic |
• The Keynesian Contradiction Again. As in the item above, there is a most ingenious paradox in place for any central bank attempting to apply Keynesian monetary policy in a logical or consistent manner, viz., the presumed (and completely illusory) tradeoff between inflation and employment. According to an article in Yahoo! Finance, “The Fed weighs its dual mandate of full employment and price stability when deciding whether to change interest rates. Given the dynamic of a slowing jobs market coupled with sticky price increases, Wall Street strategists told Yahoo Finance that the Fed has a complicated decision ahead. ‘It’s the worst kind of setup for the Fed,’ Claudia Sahm, New Century Advisors chief economist and former Federal Reserve Board economist, told Yahoo Finance. ‘They will not be cutting because we have good news on inflation. They’ll be cutting because we have bad news on employment.’” Obviously, the only solution is to get off the rather Escheresque Keynesian treadmill, and the Economic Democracy Act.
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| Sign of things to come? |
• Forget About Trump’s Terrible Tariffs? According to an article in the Motley Fool, there is one thing Wall Street fears more than Trump’s Terrible Tariffs, and that is the “ticking time bomb” of the stock market bubble: “When the closing bell tolled on Sept. 11, the benchmark S&P 500 (SNPINDEX: ^GSPC), iconic Dow Jones Industrial Average (DJINDICES: ^DJI), and growth stock-dependent Nasdaq Composite (NASDAQINDEX: ^IXIC) all catapulted to record closing highs. Everything from the evolution of artificial intelligence (AI) — a potentially $15.7 trillion global addressable opportunity by 2030, according to PwC — to the growing prospect of a Federal Reserve rate cut in September has fueled optimism and risk-taking. But the tricky thing about Wall Street is that when things seem too good to be true, they usually are.” Why are the financial elite more fearful of the stock market bubble than of the induced inflation of Trump’s Terrible Tariffs? Because a rise in consumer prices doesn’t really affect a group whose income is so high that consumer prices could double and they wouldn’t even feel it, but a stock market downturn or readjustment is a disaster, because it affects the bulk of their wealth holdings. To give the rich more concern about consumer prices and the non-rich more concern about stock prices, give each group a stake in the other’s concern by adopting the Economic Democracy Act.
• Social Security Good News and Bad News. As reported by the Motley Fool, there is some good news and some bad news about the anticipated Social Security Cost of Living Adjustment (COLA). “[T]he stakes are particularly high this year because tariffs imposed by President Trump have already led to a resurgence in inflation, and most Americans expect inflation to accelerate further in the next year.” The good news, therefore (in a limited fashion) is that the COLA will be larger for 2026. And the bad news? The increase will still be too small to make up for inflation. The solution? Adopt the Economic Democracy Act.
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| Suze Orman |
• When to Take Social Security. It is a bit of a crap shoot for most people, but the question of when the best time is to take Social Security is of overriding importance to far too many people who rely on Social Security for the bulk if not the entirety of their retirement income. The main question is whether to take it at age 62, or age 70. According to a report from the Motley Fool, there is a difference of opinion between Suze Orman and Dave Ramsey . . . and the Motley Fool says that Orman is right and Ramsey is wrong. Orman’s view is that delaying until age 67 (or age 70 for those born before 1960), while Ramsey’s advice is to take benefits at age 62. Frankly, such a question can only be answered individually on a case by case basis, but the real solution is to bypass it altogether by adopting the Economic Democracy Act.
• Macro-Micromanagement. There’s management . . . and then there’s micromanagement . . . and then there are ultra control freaks who need to oversee everything and anything in their obsessive quest for power over everyone. We are not, of course, speaking of President Trump, but it cannot be denied that certain of his actions verge on having the appearance of someone who should be concerned exclusively with the “Big Picture” obsessing over details, especially those not related to his or her area of responsibility, a sort of “macro-micromanagement.” That is why an article in Yahoo! Finance, “Trump calls for earnings reports every 6 months so execs can ‘focus on properly running their companies’,” is rather alarming in a way: “‘Subject to SEC Approval, Companies and Corporations should no longer be forced to “Report” on a quarterly basis (Quarterly Reporting!), but rather to Report on a “Six (6) Month Basis,”’ Trump wrote. ‘This will save money, and allow managers to focus on properly running their companies,’ he added. ‘Did you ever hear the statement that, “China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???” Not good!!!’” Aside from the fact that for centuries business has done virtually everything on a quarterly basis (the traditional business cycle is seasonal), managers aren’t the ones charged with actually doing the reporting; they sign off on the work of subordinates. A good manager should already be receiving reports on the performance of the company; filing with the government is simply a different form of report and shouldn’t be adding anything significant to the demands on a manager’s time . . . unless the manager isn’t properly running the company in the first place. Plus, where does President Trump think all the data collected by the government come from? Finally, the Economic Democracy Act should probably be done on a quarterly basis . . . which requires quarterly reporting.
• If I Had a Million, Part II. Evidently, not only does a million dollars not go as far as it used to, but it also isn’t as good as it used to be. Millionaires might not be rich anymore; “How to Marry a Millionaire” might be considered “settling” by gold-diggers. As noted in Benzinga, “Most people would feel like they've ‘made it’ once they hit a $2.5 million net worth. And in your 40s, that's true — you're officially sitting among the top 5% of households in your age group. Pop the champagne. But here’s the twist. Fast-forward to your 60s and that same number doesn't even get you into the top 10%. Suddenly, what once screamed ‘elite’ looks more like ‘doing fine.’ The rules of wealth don't just change with age — they move the goalposts entirely.” Of course, all this assumes that the only way to get a million (or any other amount of) dollars is to refrain from consumption. The way to let more people become millionaires without having to cut consumption is to adopt the Economic Democracy Act.
• U.S. Heading into Recession? Since the advent of Keynesian economics, the D word has been forbidden. Instead, the Great Depression that has been ongoing since the New Deal has been — literally — papered over by printing mega-trillions of fake money backed only by government debt, and the inevitable periods of panic and readjustment are called “recessions” instead. Lately, however, as the wells of unlimited government money start to look astonishingly limited, alarms are being sounded more frequently, even by those who have benefitted most from the Keynesian system. As reported in The Business Insider, “Mark Zandi has been ringing the alarm bell for a recession in recent weeks, and now, he says one indicator has pushed the chances of a downturn to an ‘uncomfortably high’ level. The Moody's Analytics chief economist in August described the US economy as being on the ‘precipice of recession.’ Speaking with Business Insider shortly after, he reiterated his call, saying the economy was at the edge of a cliff. . . . Citing data from Moody’s Analytics, Zandi said the risk of the US entering a recession in the next 12 months was 48%.” The only way to avoid this — or recover from it the right way — is to the Economic Democracy Act.
• Those Happy Golden Years. It sounds like a dream come true, but according to an article in Fortune magazine, most 65-year-old French retirees have much larger incomes than the typical Gallic working stiff — and it’s all due to the French pension and benefit system. At the same time, many people of retirement age in the United States simply cannot afford to retire. “French retirees officially bring in more income than their working-aged counterparts, as Americans are struggling to find the funds to retire and support their post-employment lifestyle. Due to France’s relatively young retirement age, lofty governmental spending on pensions, and high wage replacement rate, they’re now out-earning citizens with jobs as the country’s officials try and make unpopular changes.” Anyone familiar with this blog already knows the answer to this for both France and the U.S. — adopt the Economic Democracy Act.
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| Baron Rothschild |
• Ironynomics. Mayer Anselm Rothschild is alleged to have said, “Give me control over money and credit and I care not who makes the laws.” President Trump seems to have heeded Rothchild’s possibly apocryphal comment and added a few twists of his own. As reported in an article in Vox, as seen in three key issues before the U.S. Supreme Court, Trump appears to be seeking total control over the United States economy: 1) Usurping Congress’s exclusive power to levy taxes by imposing tariffs without Congressional approval, 2) Refusing to spend money the Executive Branch is legally required to spend (i.e., “impounding funds”), and 3) Firing Federal Reserve governors unilaterally despite the law requiring “cause” due the central bank’s alleged independence (many non-civil service employees of the Executive Branch serve at the pleasure of the president and can be terminated with or without cause). Believe it or not, adopting the Economic Democracy Act could fix this problem by returning economic power (and thus political power) to the ordinary people who elect Congress, returning power to Congress where it belongs.
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| Jerome Powell |
• The Rich Economy. Federal Reserve Chairman Jerome Powell has raised a warning flag about a possible AI bubble and relying too much on the rich . . . which is a cornerstone of Keynesian economics. According to an article in Fortune magazine, “Jerome Powell said the U.S. is seeing ‘unusually large amounts of economic activity through the AI buildout,’ a rare acknowledgement from the central bank that the surge is not only outsized, but also skewed toward the wealthy. That imbalance extends beyond markets. Roughly 70% of U.S. economic growth comes from consumer spending, yet most households live paycheck to paycheck. That demand picture has taken on a shape that analysts call K-shaped: while many families cut back on essentials, wealthier households continue to spend on travel, tech, and luxury goods—and they continued to do so in August. For now, the inflation recovery depends heavily on this dynamic remaining in fragile stasis. It’s a fix that works well until it doesn’t, if it could be described as working at all.” As usual, the solution is to adopt 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 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 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.
• Economic Personalism Landing Page. A landing page for CESJ’s latest publication (now with an imprimatur), 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., 52 or more copies) at the wholesale price, send an email to info@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.
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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