This world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaucrats. Einstein didn’t discover his theory of relativity on an order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way.
In the only cases the masses have escaped the grinding poverty you’re talking about, the only cases in recorded history are where they’ve had capitalism and largely free trade. If you want to know where the masses are worse off, it is exactly the kinds of societies that depart from that.
So the record of history is absolutely crystal clear, there is no alternative way, so far discovered, of improving the lives of ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system. — Economist Milton Friedman on the Phil Donahue Show, 1979
SAN MARTIN, ARGENTINA — We’re all sitting on the edge of our seats… eagerly awaiting a glorious future led by bureaucrats.
Yes, the apparatchiks and funcionariat are creating a Brave New World… Or so they claim.
They aim to prove Friedman wrong… as almost the entire world tries to replace capitalism and real money with government-managed economies and fake money.
Japan says it will pump in $1 trillion. And it declared a state of emergency.
House Speaker Nancy Pelosi says she’ll match that with “at least” another $1 trillion from the U.S.
Germany promised “limitless” support for small businesses.
The European Union is talking about a $540 billion program.
And the Federal Reserve is ready to pitch in $2.3 trillion in new money.
Old-fashioned getting and spending is out of date… démodé… behind the times. Now we can replace real earnings, real wealth and real money with… fake money!
Meanwhile, The Wall Street Journal reports that there are fewer and fewer people making any money at all:
A second wave of job loss is hitting those who thought they were safe. Businesses that set up employees to work from home are laying them off as sales plummet. Corporate lawyers are seeing jobs dry up. Government workers are being furloughed as state and city budgets are squeezed. And health-care workers not involved in fighting the pandemic are suffering.
Goldman Sachs says the downturn will be “four times worse than 2008.”
And demand for oil is so weak, the black goo is selling for less than $20 a barrel. There’s so much of it sitting around that oil tankers are now being used for storage, with rental rates as high as $300,000 per day (usually only about $15,000).
But don’t despair. Aux barricades! Ils ne passeront pas! The fake money is on its way.
Heroes of the Revolution
As of yesterday, 1.1 million small business loans had already been approved, totaling $253 billion in bailout money. The feds’ $350 billion small-business relief fund is almost exhausted.
Wow! These Small Business Administration bureaucrats should be designated “first responders”… or “heroes of the revolution.” They’re processing the giveaways at a fantastic rate.
Apparently, they carefully examined 6,547 applications each hour for the last three weeks. That’s 109 every minute.
At the rate of one every half a second, they had to check out the facts… verify the value of collateral… and assure themselves that everything was on the level — after all, they were giving out as much as $2 million per application!
Who gets the money? We don’t know, but like subprime mortgages in 2007, all you need is a pulse. Even hedge funds are eligible.
They may be reckless gamblers and inveterate speculators… run by people making millions of dollars. But they qualify as small businesses!
Many of them must have forgotten to hedge. Now they need a bailout!
Here’s The Intelligencer with details:
If you are a company, nonprofit, veterans organization, or tribal concern with 500 or fewer employees – or else, a self-employed individual or independent contractor – the government will provide you with a loan equivalent to eight weeks of your prior average payroll (or, for the self-employed, earnings), plus an additional 25 percent of that sum (unless that grand total adds up to more than $10 million, which is the cap for any individual firm).
You do not need to make any payments on that loan for six months. And if you maintain your workforce, then the government will entirely forgive the portion of the loan spent on payroll, benefits, utilities, rent, mortgage payments, or other debts. In other words, it will forgive more or less all of it.
The Feds’ Fatal Flaw
Yes, Dear Reader… The authorities — governments all over the planet — have a fatal flaw. They always want more power… and more control.
They (and their media toads) scare the bejeezus out of the public… and rouse the country to self-mutilation… making war against enemies, real and imaginary.
Drugs, poverty, the Koreans, the Vietnamese, Iraqis, terrorists, a virus… and the market economy itself!
When COVID-19 showed up, the feds got out the bazookas. The president’s chief economic adviser, Larry Kudlow, even proposed selling “war bonds” to pay for it.
The lockdown forced people to stop “pursuing their separate interests,” to borrow Milton Friedman’s words. Instead, Americans join the revolution — sheltering at home as they wait for their bailout checks to arrive in the mail or direct deposit.
And there, leading the charge are the feds — bureaucrats, politicians, cronies, swamp critters and Deep Staters — with trillions in fake new money.
We don’t know whether their approach to fighting the virus saves lives or not. But their revolt against old-fashioned market capitalism is certain to be a failure.
Regards,
Bill
• This article was originally published by Bonner & Partners. You can learn more about Bill and Bill Bonner’s Diary right here.