In response, the commenter zipperhead quoted that line, then wrote the following: "But isn't educating a form of salvation? Salvation from ignorance. Isn't your writing here part of your effort to 'save' people from ignorance? Whatever your beliefs may be, you believe it is important for people to know truth. And you try to give such truth as you can."
What began as an answer to that question quickly billowed into a large, complex thought worthy of a post, perhaps something more along the lines of a statement of intentions about what I do here at The Dark Wraith Forums; but even that description of my train of thought is wanting: I need to convey something a bit larger, now.
In my last article, I provided a relatively short list of articles I have published over the past four years warning of the consequences of the bad economic policies that have been pursued by the Bush Administration. Those pieces, along with hundreds of others, are important markers of my claim to credibility. In a time when adversaries on both the Right and the Left are willing to simply dismiss anyone with whom they disagree, I can use my documented record as proof positive that detractors are wrong and, more importantly, that my future predictions should not be taken as merely another sponsored voice shilling a dubious product for some special interest.
However, were this project to have been about nothing more than getting a few predictions right, I would have been finished by now. I would have concluded that I was making no money from this endeavor, and it would have become painfully obvious that no publisher wanted to put my work into the form of a book. I would have figured out that no well-endowed think tank wanted my expertise, and it would have dawned upon me that it's really not a good idea to keep writing when what I have to say sets off crazy people who write comments about me and send me e-mail messages that are positively frightful.
I am still writing, though, which means commenter zipperhead is probably on the right track, although I must decline the invitation to extraordinary potential.
I cannot say that knowledge offers salvation, and I am certainly not in the business of delivering truth. Jesus saves, and government officials tell the truth. I do not work for the young rabbi from Nazareth, nor do I work for the old goats in Washington. Truth be told, I'm not into self-destruction. It's one thing for Jesus to irritate the Sadducees and Pharisees, but it's quite another to get the Romans dragged into the family feud. Similarly, it's one thing to do business as usual in Washington, but it's a whole different ball game when the brutal laws of macroeconomics get triggered. In either case, someone's likely to get killed, and I prefer to be at home enjoying the quiet company of my cats and my computer until the noise outside dies down.
Hence, I shy from the promises of salvation offered by messiahs and the pronouncements of truth promulgated by sovereigns.
Short of grandiose claims, I used to believe that, at the very least, I could teach my students well enough that their material lives would be improved. I learned over the years that this is not the case, so I found myself somewhere along the way falling back to the position that I could improve something within them more important than their career prospects, their job marketability, or their general economic welfare.
That belief, too, has not been borne out by the evidence, but I have achieved something, and it is not trivial.
By the end of the two-course sequence in microeconomics and macroeconomics, most of my students "get it," and by that I mean that they have a comprehensive, relatively thorough model of how economies work at both the micro level (the level of the firm and the consumer) and the macro level (the level of nations and other spheres of large influence). Many of them even understand my concept of "mesoeconomics," the level of activity where entities that are traditionally addressed in microeconomics begin to have characteristics of macro-level agents.
I am not so sure I am doing good, though, by teaching students how to model economic reality. Many come to understand the chasm that exists between what they learn in class and what they see all around them. That can be maddening, and I have had students, especially recently, express their frustration in knowing what can be shared neither with those in their social spheres nor with those in the political realm.
The Two-Storied Wall
In microeconomics, in the course of teaching about the theory of the firm, I must lead students to an understanding that the beauty and purity of Adam Smith's paradigm of free markets simply does not apply to most situations because the very force of greed that makes capitalism such a powerful engine of innovation and efficiency is also, concomitantly, the force that ultimately wrecks the "atomistic" model of competitive forces that allow prices to form by a natural process not under the control of any one agent or group of agents.
On the consumer side, I mince no words about the difference between need and want: the former could be satisfied by fungible, ubiquitous products, but those kinds of goods and services offer no prospect for economic rents (that is, for profits above the return that would be available in the next best alternative use of the employed factors of production). Indeed, to gain advantageto earn "economic rent" or "economic quasi-rent"the firm must transform need into want, thereby constructing the predicate absolutely necessary for product differentiation so consumers will pay a higher price, not because a product is better (it might or might not be), but only because the consumer believes it is better. To the end of emphasizing this point, I have students read the chapter entitled, "The Inherent Need to Create Need," from the 1978 book Four Arguments for the Elimination of Television, by Jerry Mander, a former advertising executive whose work remains stunningly timely despite having first been published 30 years ago.
I assume that not one of my students will ever be a titan of industry; not one will ever be the CEO of a major corporation; and not one will ever be earning more than 90 percent of the rest of the working population. Perhaps some will, but that is irrelevant: I am teaching a legion of citizens to be deeply informed and deeply cynical. As I have put it on occasion, "I cannot protect you. That's your job. Find things to believe in, find things to love; but never, ever let your guard down. The world does not care about you. Neither do corporations; neither do most people. And neither does your government, its President, its Congress, or its courts."
As harsh as that sounds to students, from that point forward, they know I will not lie to them.
In macroeconomics, in one semester I can take students from essential principles all the way to an understanding of what happened in the United States over the past century. It is an arc that requires knowledge of a handful of basic concepts and the ability to put chains of logic together with historical data and facts. These days, that is a daunting challenge because students coming from high school (and from many prior college courses) are not accustomed to rigorous thinking. On the bright side, my students these days, although no better prepared, are noticeably and remarkably more willing to face the challenge. That is a turnaround from the way it had been for quite a few years, but it is not the result of idiotic palliatives like No Child Left Behind and other such "assessment and evaluation" rot. On the contrary, these students are sick of the paradigm: they want to know that they've been misled, ill-informed, and psychologically stunted by incompetents from top to bottom in their society. For many of them, once they figure out that they are learning about something that does not have a happy ending with their adult lives, grasping the details and reasoning of the macroeconomic story of this country is part of an intellectual rebellion. As I began to suspect several years ago, and about which I wrote in my article, "Fire and Seeds," this is a genuinely new generation of young people. They want to know, and they want to understand.
Here at The Dark Wraith Forums, I have been drawing out pretty much the same story of macroeconomics. Sometimes, the principles are relatively easy to grasp; sometimes, a little math gets involved. Occasionally, the chains of reasoning get complicated because several principles have to be brought to bear all at once.
I consider this online property my proving ground: if I can teach the macroeconomics story here, I can teach it in the classroom. More importantly, if I can present not just the results, but the reasoning, too, I am being magnificently successful. Just a few days ago, the commenter Weaseldog, wondering why I had not already gone into rant overdrive about the way the current financial crisis is being handled, wrote on a thread, "I'm a little surprised that we haven't heard a diatribe from you, concerning our Gov's efforts at hyperinflating our way to prosperity."
That was simply amazing. Weaseldog understands, at least to some important extent, that printing money at a rate in excess of the real (inflation-adjusted) growth rate of the economy will have no long-run effect other than inflation. I have been harping on that unyielding point for years, here, but I had no idea readers were actually getting this.
On the comment thread to the article just before that, commenter Minstrel Boy wrote, "[T]he chinese have cut interest rates, which means that more pretend money will flood the unstable markets which are already weakened by the presence of pretend money..."
Good Lord! He understands that interest rates are the price of money, so if Chinese interest rates are going down, that must mean they're flooding the market with more of their currency, which is already headed for disaster because, for years, they've been printing their yuan at a ridiculous rate and then buying dollars with them to make the greenback strong and the yuan weak, thereby making their imports to the United States artificially cheap and our exports to China artificially expensive.
Okay, maybe he wouldn't have said it in so many words, but he gets it, for Heaven's sake. He gets it.
So do others, here, especially the long-termers. Some of them send me e-mail messages noting this or that piece of economic news and asking if they're interpreting its consequences correctly. In most cases, they are. I intend no facetiousness when I describe this as "almost disturbing": a long time ago, I thought economics was so arcane that it could never be understood at the level of applicability by other than a relatively rare breed. Indeed, in my early years of teaching the subject, I saw each semester as a long corridor down which I must drag students to a finish line where my standard for passing them was low and condescending.
I no longer think that way. I am finally realizingmost fortunately, before being on my deathbedthat this is an endeavor that has a rolling, continually improving, good ending. Quite aside from the awful situation of our time, the understanding of what is happening, why it is happening, and how we came to be here is important in and of itself. A growing body of informed citizens is a threat to those who rely for their positions, power, and influence upon the ignorance of those around them. If there is any hope at all to save this new American century from forces of authoritarianism on the Right and the Left, it lies in a citizenry that will not be cowed into submission by lies about the past and fears about the future.
The Story Proceeds
Because I am finally grasping a certain robustness in what the reading audience here is willing and able to learn at a good, strong level, I shall push more and diverse economics principles across the table for consideration. Aside from the principles of macroeconomics necessary to launch into wholesale rants about what the Bush Administration has done wrong, I will offer occasional posts on useful microeconomics principles. Although I tend to avoid mathematical and graphical modeling when possible, there are occasions when those tools are useful. Even though I am a mathematician, I am a teacher of mathematics, too, and I know that the ritualistic use of arcane symbolics so common among the mathematically trained can make the ordinary non-mathematician simply turn off the lesson. Any normal person who read Part 3 and Part 4 of my series, "The Economics of Wreckage," should have been grimacing at those graphs, equations, and algebraic manipulations. However, the end results, especially those in Part 4, were hugely telling about the warning signs of what was coming at us in terms of economic wreckage. It was right there in the numbers, but the numbers had to be distilled through economic modeling for the flashing red lights to be visible.
The Power of Enlightenment
Now, more red lights are flashing. In fact, every time our government officials open their pie holes about their "solutions" to the economic crisis bearing down on us, flashing red lights beam out of their throats. With just a little background in economics, it is not hard to ask the right questions of these officials, knowing very well they would not dream of paying attention to the kinds of people who would know enough to make such inconvenient queries.
"Gee, George. You've just declared that you want Congress to give you $700 billion in spending authority to buy the bad mortgage assets from financial services companies. Okay, where is Congress going to get that $700 billion?"
Tax revenues? No, we're going to run a federal budget deficit of more than $400 billion this year. That means, as it is, we are already taking in about $400 billion less in tax revenue than we are spending, and that's because you and your fellow Republicans passed tax cuts lasting a decade on the pretext of anti-recession stimulus when, in fact, there was not even a recession by technical metrics in 2001.
So that leaves us with only two alternatives.
On the one hand, we can borrow the money. From whom will we do this? Oh, yes: we'll borrow most of it from all those countries that hold greenbacks in their foreign reserves. How did they get those? Ah, yes: we traded our dollars for their stuff. In the case of China, we got cheap stuff because they were pegging the yuan-dollar exchange rate at a wildly out-of-whack level, and they did this for so many years that they wiped out tens of millions of American jobs and sucked the life out of our manufacturing capital base. So now we should go and beg them for hundreds of billions of our own dollars that you (and, to some extent, Clinton, too) let them cheat us out of.
Okay, where will Congress get the rest of the $700 billion you want for play money? Well, we can just have the Federal Reserve print some. After all, it has been doing that for years, now, to prop up the economy you and your fellow Republicans were sucking dry with your incompetent fiscal policies and worthless wars. Yes, Fed Chairman Bernanke has been a darned good friend to you and the top end of the financial services sector: while the Fed was holding the growth rate of M1the kind of money that normal people useat about zero, it was blowing the growth rate of M3the kind of money that only the giants of Wall Street can see, much less usethrough the roof at a progressively faster and faster rate.
What is that growth rate of M3 right about now? (It's kind of hard to tell, considering the Fed stopped publishing the number back in early 2006). Is M3 really growing at close to 20 percent?! But if the real economy is growing at no better than maybe one percent (if that), the differential growth rate of the money supply over the real growth rate of the economy would have to eventually end up as inflation.
Let's see... twenty percent minus one percent... what's that come out to be?
Oh, my! Nineteen percent inflation.
And that's if your ever-credit-friendly personal banker, Ben Bernanke, hasn't ramped up the growth rate of the money supply even higher, which he and his fellow Governors at the Fed probably already have and most definitely will even more as the Fed cranks the money engine to keep the economic apocalypse from slamming into your sorry backside before you leave town for good next January.
So there's where we stand: George W. Bush wants $700 billion to spend as he sees fit to save America's financial idiots from the consequences of their own actions. We'll borrow it from foreigners, and what we can't get from them (what with the dollar being in the toilet, these days), we'll just print.
Bad news all around.
Turning on, Tuning in, Rocking on
Good readers, do you know what? If you understood that little narrative above, you are smarter than the overwhelming majority of Americans, who have not the slightest clue about just how limited and grim our options are right now for getting out of this economic mess.
Does it matter that you understand?
Yes. The more certain you become in your understanding, the more dangerous you become to those who want you not to understand. Furthermore, the greater the number of people who understand, the less the relevance of the mainstream media that cannot extricate itself from its incestuous relationship with those who want you to be dumb, barefoot, and pregnant with gullibility.
The downside is this: an immediate sense of frustrating powerlessness. When you know damn well what should be done, when you are awfully sure that the powers in Washington are doing exactly what they should not do, and when you know that erroneous solutions are going to be the strategies pursued in spite of what you know will be dire consequences, you will be so frustrated that you'll want to just throw up your hands and walk away.
That, or you'll want to scream your bloody, fool head off.
Not to worry, though; keep in mind that brutal cynicism is not the same as giving up. False hope is worthless, but keep in mind that, while miracles rarely happen, history has a way of vindicating the sane. Absent that somewhat satisfying outcome, at the very least, the mendacious eventually die. Once dead and in their sullen graves, occasional opportunities may arise to water their dirt blankets with bodily fluids.
Back on point, spreading the gospel of sound economics is a process. Small seeds, like the ones I have been sowing for nearly three decades in colleges and for nearly four years here, have a way of growing. Whether or not they grow to become the dominant flora of the forest is unimportant. What matters is that they did not allow themselves to be destroyed, and for that perseverance they become successful, spreading competitors in the forest of ideas.
Eventually, come Hell or high water, the first book of articles from The Dark Wraith Forums will be published. Even if I have to self-publish in the absence of any literary agent who wants to come within reading distance of my writings, there will be a book; and while that process is on-going, there will be more articles, graphics, and timely information published here.
The Dark Wraith Forums might very well be nothing more than an all-night diner on the skid-row frontier of the 21st Century, but the lights are always on in here. The coffee is hot, the sandwiches are filling, and what you learn is worth at least as much as the admission price.
Out there, night has fallen, and it's getting darker, just like I said it would.
The 21st Century has definitely arrived.
And the Dark Wraith, as always, has spoken.
Wrote Minstrel Boy:
Wrote Peter of Lone Tree:
Wrote Dark Wraith:
Wrote Moody Blue:
Wrote Moody Blue:
Wrote Peter of Lone Tree:
Wrote Peter of Lone Tree:
Wrote Progressive Traditionalist:
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