—Henry Hazlitt, Economics in One Lesson
The 2024 election cycle has already been in full swing for months here in the United States. Republicans bicker with one another on stage, Robert F. Kennedy Jr. is vying to displace the dotard Joe Biden, and various minor parties are eagerly clamoring for their 1% of the electorate. One of the chief points of contention is the economy. How bad is it really, and what should be done to fix it if something is wrong?
In most countries, central banks and treasury departments collude to fix prices on lending and manipulate the liquidity of the money supply in order to keep up a facade of prosperity. However, this facade is crumbling. Just a few weeks ago, perennial false prophet Paul Krugman assured us, "The economic data have been just surreally good. Even optimists are just stunned by how quickly and how painlessly inflation has come down. No hint of a recession, at least so far. [...] This is a Goldilocks economy." If only he hadn't said the same things in 2007 right before everything collapsed.
At least most of the folks who want to challenge Biden recognize there is an undercurrent of discontent and economic stress, but few (if any) have any real understanding of how markets and money actually work, how we got to where we are now, or how to navigate out of the morass to solid ground.
For example, RFK Jr. wants to subsidize loans in order to help the economically disadvantaged buy homes. Great! Except not. This would function as a bailout for bankers and Blackrock, ensuring buyers by subsidizing demand at peak prices now, and then leave the poor holding the bag when this housing market bubble inevitably bursts. If these new home buyers default, that burden falls on the taxpayers. Isn't this counterproductive even on a cursory examination? The Liberty Lockdown Podcast is hosted by someone with the real estate and property management experience to delve deeper still.
And of course on the Republican side of the coin, there is much hubbub about immigration, trade, China, and war. All of it completely disregards any real economic or moral principles in favor of jingoistic nationalism. Vivek Ramaswamy is probably the least-bad of the bunch, but that is faint praise indeed. At least he seems seriously anti-war. 20 years of post-9/11 wars have cost the U.S. an estimated $8 trillion and have killed more than 900,000 people. All of that death and destruction is counted as part of the "economic recoveries" post-9/11 and post-2008 because the standard models count government spending no one would voluntarily fund as "productivity."
The people who make politics their career tend to believe reality can be changed legislatively. If they issue a command, society will respond as they wish. Unintended consequences like the exploding wealth gap, boom/bust business cycles, bubbles in various assets, inflation, and a domestic police state are accidental, and we just need a few more laws to achieve perfection. Economic laws rooted in individual human motivations and actions have no bearing on their calculus. If things go wrong, somehow we are to blame, and the political class just needs more power.
Most economics analysis fails Hazlitt's basic principle. The short-term intent is paramount. The long-term consequences are not even acknowledged, much less considered openly. Just do as you are told and don't ask questions. Freedom is slavery. War is peace. Debt is prosperity.
