Nothing is stable, nothing is straightforward, everything
is fixed, and nothing is fixed. O nation of busboys and WalMart greeters,
awake and sing!
Can an empire founder on sheer credulousness? After last
Friday’s jobs report, I think so. For a culture that luxuriates in
statistical analysis (and the false idea that if you measure enough things,
you can control them), it is rather amazing that we absolutely don’t care
whether the measurements are truthful or not. Hence, an economist (sic) such
as Paul Krugman of The New York Times might ask himself how it is
that Zero Interest Rate Policy only trickles down to places where hamburgers
are sold. PK was at it again in his Monday column, yammering about “rapid job
growth,” “partying like it was 1995.” Wise men like him are pounding this
country down a rat hole faster than you can say Romulus Augustulus.
Apparently the US Bureau of Labor Statistics missed the
job bloodbath in the oil industry, especially over in Frackville where the
latest western phenomenon is the ghost man-camp (along with ghost pole
dancing parlors). It’s a veritable hemorrhagic fever of job layoff
announcements: 9,000 here, 7,000, there, thousands of thousands everywhere —
Halliburton, Schlumberger, Baker Hughes — like an Ebola ward in the oil
services sector. Not to mention the cliff-drop of capital expenditure,
meaning even steeper job losses ahead, Casey Jones. But nobody notices, I
guess because they’re out at Ruby Tuesdays eating things bigger than their
heads. Are the portions getting smaller, or are their heads shrinking?
Finance is complicated, but not as complex as the wizards
employed in it would have you believe. They would have you think it is an
order of magnitude more abstruse and recondite than particle physics, when,
in fact, it is often not much more than a Three Card Monte switcheroo. The
whole ZIRP and QE game, for instance, can be boiled down to a basic wish to
get something for nothing, that is, prosperity where nothing of value
created. Now, that’s not so hard to understand, is it? Until the economics
wardrobe team comes in and dresses it up in martingales and bumrolls of
metaphysics and you end up in a contango of mystification.
More galling and worrisome, though, is the failure of
anyone even remotely in authority to stand up and publically object to the
tidal wave of lies washing over this dying polity, actually killing it softly
with truthinesslessness. The code of anything goes and nothing matters
is turning lethal and the more it is kept swaddled in lies, the more
perverse, surprising, and destructive the damage will be. The more our
leaders lie about misbehavior in banking — including especially the actions
of the Federal Reserve — the worse will be the instability in currencies. The
more central bankers intervene in price discovery mechanisms, the more unable
to reflect reality all markets will become. The more that the US BLS lies
about the employment picture in America, the worse will be the eventual wrath
of citizens who can’t get paid enough to heat their houses and feed their
children.
An economist (sic) named Richard Duncan last week
proposed the interesting theory that Quantitative Easing can go on virtually
forever in an endless chain of self-canceling debt. Government spends money
it doesn’t have and cannot raise, issues bonds to “investors,” buys its own
bonds and stashes them in a storage vault so deep that the sun will not shine
on them until it becomes a blue dwarf — long after the cockroaches have taken
charge of Earthly affairs. Duncan forgets one detail: consequences. The
consequence of this behavior will not be eternal virtual prosperity, but
rather a wrecked accounting system for the operations of civilized human
life. We’ve stepped across the event horizon of that consequence, but we just
don’t know it yet. My bet is that we start feeling the effects sooner rather
than later and when it is finally felt, all the Kardashian videos in this
universe and a trillion universes like it will not avail to distract us from
the flow of our own blood.
