Here’s a letter we just found. It was written by a fed-up reader of a financial newsletter.
We thought you might enjoy it. Or not.
A Piece of His Mind…
“I don’t know who is writing your daily email, but whoever it is needs to go back to school to learn what “the free market” really is.
“Clearly, the writer has been living in a cave or on another planet for the past 25-20 years when the personal computer, the Internet, fiber-optic and WiFi and landline connections to the Internet made eCommerce possible.
“And the writer may not have heard of the new businesses that have sprung up, hiring hundreds of thousands of people to work in jobs that were unknown before that time. You know – Amazon, Yahoo, EBay, Etsy, Books-a-Million, Oracle, Apple, HP, Intel and so on. Not to speak of the new life given to old dinosaurs like IBM.
“So, Professor Bloom, the “right-leaning Professor of Economics at Stanford” quoted in your email, is, not to put too fine a point upon it, a a Blooming Eejit! Because there IS a reason the free market will solve it, but only if taxes and regulations do not strangle the infants of innovation and wealth creation in their cribs.
“The reason for the development of the “composition of the income mix in the 1950s and 1960s” while you may not think is clear, actually is. It happened when the Iron Boot of the Federal Government, which had been in place in the U.S. since about 1933, was lifted off the neck of the suffering economy. The burst of growth was the natural outcome of the free(d) market in operation.
“You say, ‘True believers on the right proclaim that tax cuts and regulation removal will unleash the economy, leading to greater prosperity for all. Maybe, but recent history shows that most of the gains from tax cuts gush upward and little trickles down.’
“I say, the gushing that has occurred has been due to government action making financial assets worth more than other assets. Low interest rates are a sign that money isn’t worth anything to anybody. Interest rates are no longer a measure of risk.
“The widely-predicted inflation due to huge amounts of monetized government debt has been hidden in smaller packaging for consumer goods and shrinking prices for solid assets such as real estate.
“Low commodity prices for metals and oil are another sign of hidden inflation, since other prices are stable, meaning they are going up in comparison with the commodities. High unemployment, again caused by government action rewarding not working and hence increasing the number of people with little available spending money, is also hiding the inflation.
You say, ‘True believers on the left say that greater taxes on the wealthy and more government programs to help the middle and lower classes are the answer. Maybe, but the wealthy have armies of lawyers and tax experts to help them avoid paying higher taxes (and that’s supposing the plutocrats’ platoons of lobbyists don’t prevent higher taxes in the first place) and government programs are typically boondoggles.’
“Here, you totally miss the pernicious effect that leftist programs have on the economy.
“Government programs smash aspirations of low income people [we don’t have “classes” in the U.S. – your Socialism is showing!], impoverish (by inflation or private debt) middle income earners, and scare the whatnot out of high earners or HNW individuals.
“A boondoggle is a good deed in comparison to the truly evil effects of the hundreds of thousands of pages of government regulations imbedded in the CFR (Code of Federal Regulations).
“From the Competitive Enterprise Institute: ‘The CFR stood at 71,224 pages by year-end 1975, in 133 volumes. Now, new data from the National Archives shows that the CFR stands at 175,496 at year-end 2013, including the 1,170-page index.’
“A boondoggle is just spending on a useless project. No competition at all for federal regulations.
“Please skip the facile, ignorant repetition of current memes and try to learn how the U.S. economy actually operates. Sincerely, XXX