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by Adrian Sobers
“Then Elisha prayed: ‘O LORD, please open his eyes that he may see.’” – (2 Kings 6:17, NRSV) James Otteson (Seven Deadly Economic Sins) defines The Great Mind fallacy as the idea that, “there is some person or group of people who possesses enough information, and is endowed with sufficiently superior character, that we can safely entrust with the authority of crafting policy for citizens.”
Another name for this fallacy comes in the form of one of the favourite phrases of America’s finest scholar and gentleman, Thomas Sowell: “the vision of the anointed.”
Otteson concludes the chapter with a note on planning, “The issue is not about whether there will or should be planning or not, but, rather, who will do the planning and for whom.”
Which brings me to my point.
At a recent presser, Christine Lagarde, President of the European Central Bank (ECB), announced a change in monetary policy that was presented as if it were a good thing.
It wasn’t. It was: a signal that the heist of the century by the planners par excellence will continue; an admission of failure; anything but good.
The ECB redefined price stability so that two per cent is now the inflation target instead of ceiling. Under the new mandate, inflation should be near two per cent, so that inflation that is say 0.5 or 1 per cent below (or above) becomes a “problem” to be “solved”. Before we continue we had better define our terms. The ECB is not talking about inflation in terms of an expansion of the money supply but a rise in consumer prices.
Based on their definition, they are claiming that it’s better for consumer prices to increase by say 1.9 per cent rather than one per cent. This is, of course, nonsense that no one believes; but it doubles as a clue.
A clue that the ECB is seeking to justify creating even more inflation, in terms of expanding the money supply, not an increase in consumer prices (which is a symptom of the former).
Why would they want to do that? To continue propping up governments who are running ever increasing deficits of course.
If you came to this presser hoping for a Volcker-Reagan moment and a reckoning with reality, you would have come away disappointed.
Central banks are not even pretending to be independent anymore and do not have the will to take away the punch bowl from politicians who are drunk on debt and drowning current and future generations.
Part of the Elisha cycle in 2 Kings tells of a stressful time when even the strange parts of an animal would set you back a pretty shekel: “famine in Samaria became so great that a donkey’s head was sold for eighty shekels of silver, and one-fourth of a kab of dove’s dung for five shekels of silver” (2 Kings 6:25). (Today that might read: “Wuh?! Fuh a tin o’ wuh? Put dah back boah.”) Some even resorted to cannibalism (2 Kings 6:28–29). What we are witnessing is cannibalism in the metaphorical sense by parasites who continually erode our purchasing power. We do well to stop blaming “greedy” business owners (who might very well be greedy; granted) but greed is not an adequate explanation for inflation.
Perhaps the next monetary policy shift from the ECB will be to complete the shift of two per cent for inflation: from ceiling (past), to target (present), to floor (future). Robbery is not only a common theme in monetary policy, but hip-hop with entire songs being dedicated to it.
Redman opened one such track, Somebody Got Robbed, detailing stressful times similar to aforementioned Samaria: “The economy down, you ain’t know? /N—-s is starving / Blocks can’t set up shop/Boy I love my hood but my finger on the trigger.” On Heist of the Century, La the Darkman twists the plot and the government is the victim at the end: “We hit the government.”
Since 2008, global governments have reversed this lyric and have been repeatedly hitting consumers. We are all witnesses, to Lebron James’ dominance and gradual decline on the court; and to the Heist of the Century by “independent” (wink, nod) central banks and their co-defendants, Ministers of Finance.
While their methods might be different from Redman’s account – “Where the safe, where the drugs, where the gold, man?”
– the effect of their policies on our pockets and purchasing power results in the same outcome: somebody got robbed.
(That would be us.) This heist has been in progress since 2008 so borderline no longer applies; we are at the beyond criminal stage.
You see, not all robberies are of the aggravated variety, some are sophisticated and come draped in fancy economic terms, pressers, and testimonies before U.S. Congress.
You can consult your financial adviser about inflation hedges but I doubt you will come across any better than 2 Corinthians 9:6-7.
The parasites are showing no signs of cooling their printing presses which makes things more difficult than necessary for producers; thankfully, the word from God’s printing press does not return void.
Adrian Sobers is a prolific letter writer and commentator on social issues. This column was offered as a Letter to the Editor.