OUTSTANDING article on State of the World's Economics

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

1:16a ET Sunday, April 15, 2001

Dear Friend of GATA and Gold:

The journalist Anne Williamson spoke brilliantly to the April 4 meeting of the Committee for Monetary Research and Education in New York. Since her criticism of the credit bubble is aimed at the international economic order that GATA also is out to disturb, Williamson's remarks may be of interest to you, so I'm appending them here.

There is an equally insightful interview with Williamson done by the national Catholic weekly newspaper, The Wanderer, here:


In this interview Williamson explains how the U.S. dollar and the International Monetary Fund are the major instruments of imperialism and the export of U.S. inflation.

This stuff may make Williamson the most subversive journalist in the world today. Pray for her safety.

CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.

* * *


By Anne Williamson

When CMRE President Elizabeth Currier and I first discussed what issue I might like to address this evening, times were different. Investors still had hope that the "Greenspan Put" would make matters right again. Back then a discussion of Bubblevision's cheerleading struck me as an interesting theme. But as I said, times have changed. And though nothing like capitulation has taken hold, the herd is stirring. So it's time to stop clapping for Tinkerbell, and for us all to go bottom fishing.

Sharp traders avail themselves of many tools when attempting to discern and interpret market signals -- charts, graphs, indexes, moving averages, assorted market theories, palm readers, whiskey and rye, and so forth. I have no useful comment regarding these methods, because I use something altogether different, something that might surprise you.

But before revealing the method to my madness, I want to share with you an anecdote from my years at university. When I was but a young and winsome girl -- listen to the wind blow, fellas -- and first getting a grip on the proper trilling of the Slavic "R" while puzzling over the complexity of glagolii dvizheniye, myakii znaks, and predlogiis, I was required to take a course called "How to Read a Russian Newspaper."

That struck me as odd. After all, if one could master a foreign language, wouldn't it follow that reading a newspaper would be a natural act that did not require any particular study?

Well, yes and no. You see, Soviet newspapers had a particular set of challenges for students of the Russian language. These challenges were ideological in nature, and so the course about reading Russian newspapers was really a course in learning Soviet "code."

For instance, we learned such curious things as that the phrase "cosmopolitan elite" meant "Zionists," and that it was not permitted for the word "crisis" to appear in any sentence or headline with the word "Komsomol" -- "Young Communist League."

We might laugh today, but I could teach the same sort of course starting tomorrow to students of the English language. And no better text could I have than The New York Times, which, like the Fed, is a quasi-public utility, giving each of us daily all the news America's Ivy League socialists think we are fit to have.

After reading an article entitled "Following the Money, But Also the Mind," in the Feb. 11 issue of the Sunday New York Times, it was clear to me something wicked was coming this way, and that the predicate for a beguilement was being laid. I speak of course of a new discipline, "behavioral economics." Quoting from the article:

"Behavioral economists help to explain how booms persist while busts are difficult to reverse. Their research sheds light on why identity -- the traits people assign to themselves and to others -- plays a huge and often damaging role in the economy."

I shudder to think of the implications of American socialists applying identity politics to economics. But here's the key point:

"And if the behaviorists prevail, the mainstream view of a rational, self-regulating economy may well be amended and policies adopted to control irrational, sometimes destructive behavior. Twenty-five years of deregulation might lose its appeal."

I confess that in reading this article I was tempted to think that history really does have a plan. After all, the Ivy League's former heroes, the "quant jockeys" -- those neo-Keynesians who believe that all relevant human action can be reduced to a mathematical formula -- had been busy at taxpayers' expense foisting their destructive and deceptive theories upon innocent people around the world for over a decade. The subsequent ruin of many a foreign country on the basis of their miserable, ill-considered advice can be witnessed to this day in Asia, Russia, Eastern Europe, and Latin America.

But I fear that the most long-lived legacy of these economists is the intellectual deceit in which they engaged. While employing only the rhetoric of free markets, and not the true methods of economic liberty, they were in fact dispensing statism and cronyism.

There's nothing "free market" about IMF subsidies to corrupt regimes, about privatization in the absence of property rights, about the extension of the U.S.'s lunatic tax regime abroad, about the funding of state gangsterism with other people's money, nor about the establishment of paper currencies whose true lifeblood is the printing press. All that is not even Keynesism, but instead pure economic predation of the sort all empires have engaged in since time immemorial.

And so the Ivy League's quant jockeys sallied forth, their pockets stuffed with dollars to bring devaluation and market collapse to tens of millions of people. What they hadn't counted on was that the host country of their presumed empire would, in time, experience the same miserable result in a global boom gone bust. Today Americans are faced with collapsing share values, and, as a consequence, the cancellation of credit cards, the foreclosure on loans extended for the purchase of homes and automobiles, of corporate layoffs and of factory cutbacks and/or relocations abroad to venues with lower labor costs.

These results are not the "new era" goods the Ivy League's quant jockeys have been advertising these many bubbly years.

In the certain absence of apology or remorse, what's their defense to be?

I think we can all guess, even without the assistance of The New York Times or the Ivy League's newest generation of economists, the behaviorists. Clearly, the defense of lamestream academics is that the problem lies not with their theories nor with the greatest expansion of cash, credit, and government favor in world history, but with the people. Greed, most especially that of the people, is the problem, they will say. Just this morning did Steven Rattner of the investment firm Quadrangle Group lay it out for us on the Times's op-ed page. Here's what Mr. Rattner had to say:

"We cannot expect miracles from the Fed, but only the slow salve of interest rates gliding prudently down. Instead of blaming Mr. Greenspan, we should reflect on the willing suspension of disbelief that allowed us to ignore everything we have been taught about sound investing. We brought this period of drying out upon ourselves."

In other words, it's our own fault. Gee, and this from the same crowd who has for years been hailing the American consumer as the savior of the international economy.

I resent the new propaganda's rationale as much as I resented the false promises of a "new era." I resent it as much as I do Robert Shiller's very good book, "Irrational Exuberance," which -- after roaming far and wide through media and psychology for 233 pages -- devotes but one page and four lines to the subject of monetary policy and speculative bubbles. Therein Professor Shiller informs the reader that the genesis of a speculative bubble is "a long, slow process, involving gradual changes in people's thinking." Not a word about the irresponsible expansion of money and credit that are the very stimuli that lead to those very "gradual changes in people's thinking."

A great silence is what all these behaviorists share. Not a one of them will discuss the true source of bubbles, panics, and manias, which is not a predictably responsive human psychology, but rather the secret and destructive operations of a central bank.

To these men I say: Banks and citizens did with money what they are supposed to do; they invested it. Just because the money monopolists and their spokesman do not address the Federal Reserve's having been engaged in a money-printing mania does not make it any less true.

Yet how convenient it is that the Ivy League now has a small squandron of new theorists at the ready to explain to the rest of us our stupidity and cupidity. The implication is that they themselves -- the global managerial class that itself is so very redolent of Milos Djilas's "new class" -- are like gods, and if we but listen to them and follow their edicts, all will be well.

I assume they mean that all will be well just as it was in Thailand, the Phillipines, Indonesia, South Korea, Russia, Brazil, Argentina, and Turkey.

I shake my fist in their collective face.

The truth is that wealth -- real wealth that serves all men in all places at all times -- is created for the most part by people who do not speak second languages and are not members of any faculty club. Educated or not, and if American they are largely illiterate nonetheless, for the most part they dress badly and frequently have dirty fingernails. Their lives are subject to all the disorder the raw impulses of human nature compels.

But it is they who pour the steel, mine the earth's treasures, bake the bread, and lay the bricks of the very structures that support the fragile civilization we still enjoy, however tenuously. We mock them and their efforts to provide for themselves and their families at our peril. It is they -- the mass of humanity -- upon whom all of us must rely for civilization's future, and when the greater of us suck dry the lesser of us, we debase both ourselves and our shared future.

The simple truth is that until we free money creation from the manipulative hands of a self-proclaimed elite and return government to its proper role as the regulator of weights and standards -- and I do use those words symbolically -- everything we treasure as individuals and as a people is at risk.

And so when you read in The New York Times, as you increasingly shall in coming days, of the behaviorist economists, when their as-yet-obscure names are the stuff of talk shows, scholarly journal articles, and think-tank manifestos, only then will you be able to say we've found the bottom.

After all, it's a tricky matter to decide at which exact point the zeitgeist is to change from hailing consumers as heroes to denigrating them as greedy fools. The process of wealth destruction now afoot on Wall Street will guide the media; they'll figure it out, and they'll let us all know long after most of us have stopped caring. And, again, that's when you'll know the market has found its bottom.

I just hope that when we all get there, there's a drop of liberty left.

In the meantime I'll keep praying that those human bricks of civilization -- the toiling mass of mankind -- are wise enough to resist the siren call of their betters, who will surely be promising falsely a perpetual security in return for the last of our freedoms.


-- meg davis (meg9999@aol.com), April 15, 2001


Great post! Right on target. The chickens hatched by the Federal Reserve are coming home to roost. Unfortunately the ones who will suffer the most are those who believed that "new economy" malarkey. Empty talk from empty heads. No wonder they call economics the dismal science. Dismal it is, science it isn't, unless you consider astrology scientific. Abolish the Fed and return to honest money!

-- Warren Ketler (wrkttl@earthlink.net), April 15, 2001.

I loved the comment: "I shudder to think of the implications of American socialists applying identity politics to economics."

These are the same snobbish jerks who have been applying "identity politics" to the issue of the U. S. population explosion. They would rather call names then have an intelligent discussion.

-- K (infosurf@yahoo.com), April 15, 2001.

The herd never stirs until the grass grows thin...

-- Will (righthere@home.now), April 16, 2001.

Moderation questions? read the FAQ