WHY WE HAVE AN UNPRECEDENTED ECONOMIC BOOM | 1999-01-16
Dow-Jones is setting new records, and Bill Clinton is getting credit for it. It is time for us to talk about what is really going on.
The stock market has hit another high. Everybody has been watching for it to go into a nosedive for years. As a result, every shock causes the market to go down hundreds of points, as everybody waits for The Big One. The fact is that we have had a boom every since the early 1990s, there is no end in sight, and nobody can understand it.
I propose to explain to you what is going on here.
First, a quick word about why I feel qualified to talk about this.
To put it briefly, I am a trained economist, but DESPITE that fact, I know something about economics.
While I was studying graduate economics at the University of Virginia, I had a total of about eight professors for different subjects. I was really bowled over some years later when one of them, who had been the second reader for my doctoral dissertation, won a NOBEL PRIZE!
A few years after that, ANOTHER of my former professors won the Nobel Prize!
How many graduate students are taught by TWO future Nobel prize winners?!
Why did we have such a mass of talent at the University of Virginia at that time? The reason is simply: we had almost the only CONSERVATIVE economics faculty in the United States!
My father used to say that an economist is a person with a watch chain that has a Phi Beta Kappa key on it, but no watch. In other words, people would be a lot more prepared to say we economists know all about economics if more of us were RICH.
But the fact is that most academic economists are liberals, and they don't really know anything about the real world. As is the case with all liberals, nothing liberal economists advocate has ever WORKED. (PLEASE SEE my November 21 article, "It Doesn't Work.").
Instead of trying to do anything with their own money, liberal economists persuade people to let these leftist economists plan their economies for them.
These economics professors never make any money, but they are always insisting that the economic planning experts they train should be put in charge of planning and running whole countries. This is called socialism.
It should not surprise you to find out that, in the unique Southern school I went to in the 1960s, where the caliber of the professors was so high, that socialist nonsense was laughed at. One of my professors, an expert on Soviet economics, was one of Barry Goldwater's two economic advisors in his presidential campaign. He was an expert recognized world-wide as having changed our whole view of the Soviet economy, and he was NOT one of the two later Nobel Prize Laureates!
This was the main, tiny reserve of conservative economists in America, and you can see that it was brilliant.
To sum up what I am saying here: despite the fact that I was trained in economics, and the fact that I taught it at the college level, I actually know something about it.
One thing I have learned is that you have to ignore the complicated nonsense and try to find out what is really going on.
While everybody is trying to explain the present boom in terms of Optimal Interest Rate Adjustment or in terms of Fiscal Policy, or because of sunspots, let's take a look at the obvious reason for it
The Cold War is over.
This does not only mean that Communism is gone. It also means that socialism has been overwhelmingly discredited. Even China and Cuba are going towards the market system.
This means economics is no longer the worldwide province of pure nutcases. So things are going very, very well. Now, follow me closely.
You cannot understand politics today unless you understand that liberalism and leftism in general is not just "intellectually incorrect." You have to understand that leftism is SILLY. You have to LAUGH at the bozos with PhDs who told us for decades that an economy would be EFFICIENT if it is owned and run by the government.
Unless you face the pure madness of yesterday, you cannot understand why things are so much better today.
Almost everything in our society is based on the results of our having accepted yesterday's liberal insanity.
To understand our present crime level, you have to face the fact that it was not some slight error in judgment that made PhDs and all those who listened to them demand that criminals be treated as victims. The the crime rate skyrocketed because, in obedience to these so-called "intellectuals," we went mad.
Our children cannot read, not because of some highly intellectual error, but because of one dumbass fad after another, each one backed solidly by the education bureaucracy.
In the same way, our present boom is the direct result of the end of an era of insanity. Now the world is in a long, long economic boom because it is rebuilding from the total destruction socialism caused.
For over fifty years, the entire third world, most of mankind, has lived in concentration camp conditions. Most of the world has lived at a level that we would not let a DOG in our country experience!
Yet, even as these people starved and lived in filth, there was plenty of capital in the Western World just waiting to be invested. Japan took advantage of Western investment, and its standard of living soared.
Japan was not only a hungry Oriental country in 1945, it was a BOMBED OUT oriental country in 1945. In forty years, using capitalism, it had the highest per capita income on earth.
In the meantime, the rest of Asia just lay there and starved. In India, democratic socialism ruled. In China, Communism ruled. Throughout Asia, some form of socialism was in control. Western liberal economists were very, very happy because they were very, very influential.
What kept most of the world living in a giant, starving concentration camp?
The answer comes in one word
We all know that American and European "intellectuals" were admirers of Russia and China, and we all know just how incredibly insane the economic theology of those countries was. Russia is worse off today than it was in 1913.
But the same academic planners ruled in India and Africa and in all of the rest of that giant concentration camp. All their leaders went to Western universities, and went home to plan their economies as they had been taught. They didn't try to attract Evil Western Exploiters who had money to invest. Oh, no, they tried to PLAN their way into prosperity.
So what happened?
Just what any sane person would EXPECT to happen!
Now the insanity has passed, and these countries have been freed from their socialist hypnosis.
So now that enormous concentration camp is trying to attract investment.
As that investment flows into the third world, at least half of the world's economy is being constructed from the ground up. It is a gigantic boom, and it will last for some time, unless the socialists find some way to stop it.
The worldwide boom we have today is exactly like the boom that occurred after World War II in Europe. Europe had to rebuild its entire bombed-out infrastructure. There were a couple of false starts between 1945 and 1949, and then, finally, the reconstruction of Europe got under way and everybody became very busy.
When Europe got around to rebuilding its whole economy, there was an enormous boom around the world.
The insane economic planning of the last fifty years has been far more destructive to far more people than a DOZEN World War II's. We are reconstructing OVER HALF OF THE WORLD from the disaster that insanity caused.
It is a titanic task, and it will keep the world's economy employed for many years to come.
I hope the world enjoys this boom. God knows humanity has paid enough for it.