Wednesday, March 11, 2009

Geithner Urges Fascism

From Bloomberg:
March 11 (Bloomberg) -- Treasury Secretary Timothy Geithner urged the Group of 20 nations to take “forceful” actions to end the financial crisis and called for an expansion of the International Monetary Fund’s supplementary borrowing program by about $500 billion.

“This is a global crisis which requires a global response,” Geithner said today in a statement from Washington. “G-20 countries must take strong macroeconomic and financial sector measures.” A “reasonable benchmark” is the IMF’s recommendation for stimulus equivalent to 2 percent of a nation’s gross domestic product, Geithner said.

What more is there to say? "Forcible" actions? I do not think this was poor word choice. He knew exactly what he was saying. It makes me cringe. This reveals the true nature of the so-called Establishment. I have mentioned a few times that the consumer should be the sovereign of the marketplace. This is not just gratuitous Austrian-speak. Some might cringe as it sounds "consumerist," but it is actually quite critical. The economy ought to be shaped by the desires of consumers. They are the ones who should decide what is to be produced and how resources are to be allocated. This is one of the central insights of Austrian theory and its placement of individual man as an economic actor at the center of economic decision making. Not supply and demand. Not credit, money, government, or math. The titles of the "great works" of the different schools is telling. Keynes: General Theory of Money and Credit. Friedman: Capitalism and Freedom. Mises: Human Action. That says it all. If consumers want a rurally based, agrarian lifestyle, the economy ought to be in the business of catering to those needs. If it wants urban hard living, well, the economy ought to follow along, satisfying those needs. Obviously, some things are simply physically incompatible and there's nothing the economy can do about that, but the point is that social forces and the satisfaction of individual desires and dreams ought to dominate what an economy strives to produce and how it functions to satisfy those desires. We may gag when we look at the magazine rack at the grocery store and see what it is that people are reading (or at least what magazines estimate will sell well) but we must remember that these consumption patterns have been shaped by a century of government meddling. How would consumption patterns have been different without the monetary expansionism and the newly implemented income tax in the 1920's? Would there even have been a rise in "consumerism," which might be better described as "consumptionism," without the flames being fanned by inflation and heavy taxation? We'll never know. Mr. Geithner, for one, doesn't seem interested in finding out. He's got taxes to collect and money to inflate. It is clear that he and the other powers-that-be see things very differently. The economy does not exist to serve the consumer (i.e. the population). The population exists to serve the economy, which itself exists to serve the state, which is to say, those in charge. If individual people think the present environment is too risky for investment right now, or they don't think that the extra work to get GDP up is worth the return it will get them, or they would like to save their money rather than spend it, well that is just too bad. Geithner wants full employment, money flowing into the stock market and the banking system, and higher consumer spending, and he intends to get it. The economy has to grow, because taxes have to be collected, because the government has an agenda and that requires a budget. There are bills to pay. Politicians have big dreams for our country, and that costs money. There is American greatness to consider. It's going to be Washington's way, because that's the American way, and that's all there is to it. After all, we voted for the guys didn't we? Well, that's a mandate now, isn't it? Can anybody say fascism? Later on, there is mention of a gold sale:
The Obama administration soon will also push Congress for legislation that allows the IMF to “mobilize” its stockpile of gold, Geithner said today. Congress would need to approve the IMF funding expansion, although it wouldn’t count against the budget deficit, he said.
This is to raise money, of course. Not to suppress gold prices. Geithner needs dollars to implement his plans. He'll probably print them. I think I'll get some gold while prices are still low. $900 an ounce is low, you say? Low.

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