Monday, January 6, 2014

Bernanke's Frustrated? ... Well Boo-Hoo

By, Chris Rossini

In a speech given on Jan. 3, The Maestro The Hero, Ben Bernanke, mentioned an area that has puzzled him in his central planning adventures:
Disappointing productivity growth accordingly must be added to the list of reasons that economic growth has been slower than hoped.
Now, to the average person, that may seem like an innocent statement. The use of words are something you'd expect to hear from those who "run the economy." But to close observers, it's really a disastrous mess.

First of all, as Murray Rothbard pointed out in Man, Economy & State:
“What is so good about growth?” The econ­omists, discoursing scientifically about growth, have illegitimately smuggled an ethical judgment into their science—an ethical judgment that remains unanalyzed, as if it were self-evident. But why should growth be the highest value for which we can strive? What is the ethical justification? There is no doubt about the fact that growth, taken over as another dubious metaphor from biology, “sounds” good to most people, but this hardly constitutes an ade­quate ethical analysis. Many things are considered as good, but on the free market every man must choose between different quantities of them and the price for those forgone. Similarly, growth, as we shall presently see, must be balanced and weighed against competing values. Given due consideration, growth would be considered by few people as the only absolute value...
So when Bernanke says that "economic growth has been slower than hoped," the question must be asked: "Hoped by whom?"....And the answer is Bernanke & his central planning buddies.

Rothbard sets it straight on how things should work:
In a free market, for example, every person chooses how much future growth he wants as compared to present consumption. (my emphasis)
Bernanke then pulls out the excuse card to explain why his "hopes" were not met:
Incidentally, the slow pace of productivity gains early in the recovery was not evident until well after the fact because of large data revisions--an illustration of the frustrations of real-time policymaking. (my emphasis)
Should we be pulling out our hankies? Or perhaps a violin?

In this corner of the Internet, The Hero is not going to get encouragement like "Go get 'em next time Ben!" .... or "Invest in stronger computers that can crunch those numbers faster".... or "Work Krugman harder next time to come up with the right combination to the lock."

Sorry...there are plenty of other outlets that will assist in keeping the delusions alive.

Here, we'll tell the truth. Bernanke, as well as every central planner before and after him, is engaged in a futile act. Central Planning of economic life only leads to the destruction of economic life. There are no side roads, or short cuts that will work. It's a one way, step-by-step slog, to a dead end called economic ruin.

Bernanke thinks he has "frustrations"?

How about the rest of the world, that have to live lives as lab rats in his grand "experiments". How about economic life being like a constant ride through a washing machine?

Boom / Bust / Boom / Bust / Boom / Bust ...

How about the "frustration" of constantly watching your bills go up? With every TRILLION that the Fed creates in its "experiments," it sticks a dagger into our wallets and bank accounts.

How about the "frustration" of having to get a second or even third job? Or what about the "frustration" of chronic unemployment because the Fed won't let the market clear all of the malinvestments that the central bank itself has created? What about the "frustration" of watching loss producing crony companies stay in business because of the Fed bailouts.

It's one thing to sit in a marble palace and be "frustrated" to see your delusions of grandeur not work out. But the real "frustration" lies with the population at large (minus the cronies, of course) who have to suffer the abuse until the day finally comes when we can End The Fed.

Chris Rossini is on TwitterFacebook & Google+


  1. Any insights from Man, Economy, and State are greatly appreciated. It is a bear to tackle, but posts like this make me want to dive in. Thanks.

  2. Excellent analysis. Thanks for the Man, Econ and State quotes. Prof. Rothbard was spot on. Next time you quote from a book, could you please add the page number? That would help us find it quickly. Cheers

    1. Here's a quick link to the HTML version:

  3. Great job, Chris. I'm so glad I've finished MES and am working through P&M. I remember this quote in particular too.

  4. Nicely done, sir. I too remember when I first read that quote. It really knocked me for a loop and helped dislodge my Chamber of Commerce growth first mindset. Rothbard's biology reference got me thinking something along the lines of, "Right, why is growth necessarily good? Unchecked growth in an organism is cancer."

    Your article helped me see an analogy between Fed-controlled markets and allopathic medicine: Boom / Bust = Cancer / Chemo. Just keep repeating until the patient dies.

  5. I focus on the thought that growth cannot be achieved.

    Economic growth is fueled by the supply of money, security, and the technological ability to manufacture and produce; these are no longer present; a deflationary bust will be the outcome.

    Yes, that's right, the economic factors of growth are no longer present, as the bond vigilantes in calling the Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, PIVOTED the world from the paradigm and age of liberalism into that of authoritarianism, and as such the economic deflation is that is already underway in France, EWQ, Italy, EWI, and Greece, GKEK, will worsen, and a deflationary bust will come soon, first to the Emerging Markets, EEM, and then the rest of The World, VT.

    The paradigm of liberalism supported economic growth via the dynamos of creditism (which provided a swell in the supply of money), corporatism (which provided security) and globalism (which provided manufacturing and production).

    On October 23, 2013, the bond vigilantes in calling the Interest Rate on the US Ten Year Note higher from 2.48%, PIVOTED, the world from the paradigm of liberalism into the paradigm and age of authoritarianism, which features the singular dynamo of regionalism establishing economic destructionism.

    Liberalism’s dynamos of creditism, corporatism, and globalism, are no longer present to support economic inflationism and its partner economic growth, as the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, and now higher from 2.99%, have not only begun to destroy fiat money, that is Aggregate Credit, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, but are now beginning to destroy fiat wealth, World Stocks, VT.

    The bond vigilantes in calling higher in the Benchmark Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, as well as the failure of debt trade investing and currency carry trade investing on January 2, 2013, was a dual extinction event that destroyed the foundation, capstone, and centerpiece of liberalism, that being the investor; and are birthing authoritarianism’s counterpart, the debt serf.

    The Means of Economic Destructionism, that is the Benchmark Interest Rate, ^TNX, rising to 2.99%, has caused investors to derisk out of debt trade investments, ie EU, and out of USDFED and EURECB, currency carry trade, investments, ie GREK, and VTI, with the result that World Stocks, VT, Nation Investment, EFA, and World Financial Institutions, IXG, are now trading lower in value.

    Profit taking from unwinding debt trades, such as in Leveraged Buyouts, PSP, and in Leveraged Real Estate Blackstone, BX, and currency carry trades, such as Small Cap Pure Growth Companies, RZG, such as ROLL, JBT, MEAS, HEES, SNX, NNBR, RFIL, DXPE, and PKOH, is going to decapitalize the supply of money, dissolve security, and the destabilize the ability to manufacture.

    Economic growth is now impossible; it cannot be achieved. Global economic deflation and economic recession, characterized by falling GDP, and a whole host of other economic metrics, such as credit contractions, are the tail risk of liberalism’s monetary stimulus and credit easing.

    Much more located here...

    1. RBS Pays $600 Million for Manpulating Interest Rates … But Big Banks Are Manipulating EVERY Market to the Tune of Trillions of Dollars