Recently by Bill Bonner: No Cutting Back: The Bernanke Money Printing Story
That’s the great beauty of a real economy! It rarely takes you where you want to go especially if you’re an activist central planner or an interventionist finance minister. But no matter how much you struggle with it no matter how badly you manipulate it no matter how much you try to stitch it up with rules and regulations
it ALWAYS takes you where you deserve to go.
Look at what happened back in ’71. Nixon’s move to take the US entirely off the gold standard was hardly noticed. Because he announced something even stupider that day. He told the world that henceforth prices and wages would be controlled by the feds. No kidding. His wage-price controls were designed to put a brake on inflation.
Did they work?
Ha ha do you have to ask? If you could control inflation by executive decree well, it would be a lot different world than the one we live in. You can’t do that. And when you try to do that, you don’t get a world of stable prices, growth and prosperity. What you get is what they got in the Soviet Union, when they controlled the price of everything. They got a lot of nothing
nothing on the shelves and nothing worth buying.
We remember visiting Poland in 1977. It was a delightful place for a driving holiday because there were no cars on the roads. People didn’t have cars. And the trucks were usually off the roads too. They were broken down usually alongside the road with their hoods up.
There were no hotels either. And no restaurants worthy of the name. You just had to make do.
You’d go into a shop. It was drab. Empty. There were usually two or three dozy clerks but nothing to sell. Just a few cans. What was in the cans? It was hard to tell. But since that was all there was, you bought it and ate whatever dreadful thing was inside.
Later, in the ’80s, we took a trip to the Soviet Union. On the plane with us, on a flight from Moscow to Minsk was a woman with a toilet seat in her lap. It turned out that she had been raised in Tennessee and had a twang to her English.
What are you doing with a toilet seat, we wanted to know.
Oh I just bought it in Moscow, she explained. There aren’t any toilet seats for sale in Minsk.
But isn’t that an expensive way to get a toilet seat? I mean, this is a three-hour flight.
No The flight is priced in rubles. And the ruble isn’t worth anything. It actually cost me more to buy the toilet seat than the roundtrip ticket.
See what central planning produces? Absurdities. Monstrosities. Imbecilities. Coming soon to your neighborhood.
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and The New Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007).