Yellen For Help - Forget It

Let's pretend that I am a financial consultant. Let's say that you have fallen on hard times. All you have is a part time job and you can't pay your rent and feed your family. So you call me in to advise you. After I listen to your sad tale, I ponder on it for a time. Suddenly my face lights up with a big smile and I tell you that I have the perfect solution. So I give you a shiny new credit card. I explain to you that this card has no limits. So pay your rent. Buy some food. Buy a new car. Take a vacation. Do whatever you want. The more you spend the more financially sound you will be. And, by the way, you can do this as long as you want.

So you listen to my spiel and contemplate the concept. You think, "gee, that would make my life so much easier". Then you turn to me and ask, "What happens when the bill comes due?" My answer, of course, is to pay the bill with the credit card. Don't worry. Eventually you will come up with a solution. Maybe.

If you understood all of that, you grasp the basics of Keynesian economics. The economic theory much loved by liberal politicians the world over. Why do liberal politicians love it so much? you ask. Because they can fund anything and everything they like without worrying about results. Then they can pay the tab with other peoples money. 

John Maynard Keynes was a major force in English economics early in the twentieth century. His economic theories took hold and he became the economic darling of the British ruling class. I have often tried to understand why the English took to his ideas so readily. The only reason that I can come up with is that the English don't get a joke.

But, as I said, his ideas took root in the British upper classes and soon spread to liberals all across Europe. Virtually every country in Europe adopted Keynesian theory as the base for their economic system. High taxes and lots of welfare. A liberal Utopia. Look how this has really worked out so well for them. France, Spain, Greece, Portugal. If you like high taxes, low growth, and your country's treasury going broke, Europe is the place to be.

The problem is that since Lyndon Johnson's "War on Poverty", our government, slowly but surely, has moved ever closer to that European model. The past five or so years should prove to anyone how insidious it is. Ben Bernanke, the friend of big banks and Wall Street, has been the Fed chairman for sometime now. He created the Bernanke Bubble with his Keynesian monetary policies and has continued to inflate this bubble every year. Relentlessly. So now he is retiring. Presumably to get out of town before his bubble bursts. In his place we will, undoubtedly, see the administrations nominee, Janet Yellen.  Now, I have heard that someplace she has a bronze bust of old John Maynard Keynes, before which she burns votive candles. She is a true believer. So don't go yelling for help as things get worse because all you'll have is Yellen for help.  And that will be no help at all.