Our Orwellian Economy
by Charlie Husen
Originally posted July 07, 2010
OUR ECONOMY IS IN THE FINAL ACT OF AN ORWELLIAN DRAMA. Just as in Orwell’s fiction, the individual and the truth are usurped by the power of the state.
• Our Ministry of Housing had a goal to make homes affordable for the lower classes. Now that these homeowners are desperately underwater, rich investors are buying up the lower end real estate. Many members of the lower class that were helped by the Ministry of Housing are destined to rent forever.
• Our Ministry of Lending had a goal to make mortgages affordable for all. Now, the indebtedness of our total mortgage market is equal to the value of our mortgaged housing stock. So in the aggregate, anyone with a mortgage is just a high-priced renter.
• Our Ministry of Jobs had a goal to increase employment. It has heavily subsidized the non-productive public and financial sector jobs market. To pay for these subsidies the productive private sector was heavily taxed. Now, many of these formerly productive middle class jobs are either being shipped overseas or are staffed by illegal aliens.
• Our Ministry of Finance had a goal to spur investment. It has created two huge investment bubbles. Now our nation of terrified investors has created an even bigger bubble in the perceived safety of long term bonds.
• The Ministry of Sound Investing had a goal to manage interest rates for the benefit of investors. It is now punishing savers with zero percent interest rates and using the windfall to bail out speculators.
• Our Ministry of Sound Money had a goal of controlling prices. One dollar in 1950 is now worth 12 cents.
• Our Ministry of Sound Government had a goal to reward citizens for voting appropriately. For the past 15 years our politicians have used ultra-long-term debt to purchase votes in the next election. Mathematically it has become impossible to pay back this liability with future income, so by definition it is a Ponzi scheme.
• Our Ministry of Sound Accounting has created bookkeeping techniques to hide the Ministry of Sound Government’s Ponzi scheme.
• Presently our Ministry of Truth is saying we need to borrow large amounts of money from hostile foreign nations to increase our children’s standard of living and keep them safe in the future.
Debt and consumption are good. Saving is very, very bad. Our government and our financial sector are good. The corporate sector is evil. Up is down. And left is right. There are many allocation problems with our economy today caused by bad government policy. This is why I can’t fathom why our economists feel that more government power and more subsidies to the financial sector can produce more private sector jobs.
In the end we must listen to the Ministry of Fairness when they say, “all citizens are equal.”
And, as good citizens we must understand that, “the government and the financial sector are more equal than everyone else.”