11/05/10 Delray Beach, Florida – That’s the great beauty of a real economy! It rarely takes you where you want to go…especially if you’re an activist central planner or an interventionist finance minister. But no matter how much you struggle with it…no matter how badly you manipulate it…no matter how much you try to stitch it up with rules and regulations…
…it ALWAYS takes you where you deserve to go.
Look at what happened back in ’71. Nixon’s move to take the US entirely off the gold standard was hardly noticed. Because he announced something even stupider that day. He told the world that henceforth prices and wages would be controlled by the feds. No kidding. His wage-price controls were designed to put a brake on inflation.
Did they work?
Ha…ha…do you have to ask? If you could control inflation by executive decree…well, it would be a lot different world than the one we live in. You can’t do that. And when you try to do that, you don’t get a world of stable prices, growth and prosperity. What you get is what they got in the Soviet Union, when they controlled the price of everything. They got a lot of nothing…
…nothing on the shelves…and nothing worth buying.
We remember visiting Poland in 1977. It was a delightful place for a driving holiday because there were no cars on the roads. People didn’t have cars. And the trucks were usually off the roads too. They were broken down…usually alongside the road with their hoods up.
There were no hotels either. And no restaurants worthy of the name. You just had to make do.
You’d go into a shop. It was drab. Empty. There were usually two or three dozy clerks…but nothing to sell. Just a few cans. What was in the cans? It was hard to tell. But since that was all there was, you bought it and ate whatever dreadful thing was inside.
Later, in the ’80s, we took a trip to the Soviet Union. On the plane with us, on a flight from Moscow to Minsk was a woman with a toilet seat in her lap. It turned out that she had been raised in Tennessee and had a twang to her English.
“What are you doing with a toilet seat,” we wanted to know.
“Oh… I just bought it in Moscow,” she explained. “There aren’t any toilet seats for sale in Minsk.”
“But isn’t that an expensive way to get a toilet seat? I mean, this is a three-hour flight.”
“No… The flight is priced in rubles. And the ruble isn’t worth anything. It actually cost me more to buy the toilet seat than the roundtrip ticket.”
See what central planning produces? Absurdities. Monstrosities. Imbecilities. Coming soon…to your neighborhood.
Enjoy your weekend,
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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OK, OK I get it! I’m gonna stock up on toilet seats
Seriously, when the gov decides to fix prices and wages, as in the Fed fixing the price of money, it signifies an advanced stage of desperation and futility. Coming soon to a theater near you…
There are dozens of ways to evade price and wage controls.
Yikes I am old enough to remember wage and price controls…(I was only 12 but I remember it) I am in Canda and we had that here too around 1972 coutesy of Pierre Trudeau our then Prime Minister.
Did not work worth a damn. Our inflation never went away until the Reagan Volker years as we piggy backed on the U.S. at that time.
Central Planning of the economy…
From the supposed center of free enterprise
God help us…
Traveling in Poland in 1977 I traded a pair of blue jeans for Polish money and was unable to spend it all in a week.
When inflation really got going in the USA I remember getting a mail order catalog with a sticker on the front “Increase all prices by 10%”
QE widens the gap between rich and poor, nationwide and globally – the gap between the powerfull and the powerless. Inflation means roughly that assets go up equally…so who wants inflation? And who wants deflation? Sadly for the latter, they have nothing to say…
Everyone see3ms to think that Bernanke is just stupid & out of touch with reality, I don’t. I think he is a con man & a shill for the Banksters & CEO’s of the big corporations, & this 2nd round of money printing is a way to increase stock prices so that all of them ( the insiders ) can sell as much as possible of their holdings @ these inflated prices, & get away clean, leaving the workers, & the American public holding the bag, as all of the value runs out the bottom.
Bernanke is a brilliant man who successfully guided us out of the worst financial mess in history. I’d like to see you try to handle that.
If you can’t see that economic numbers are stable and getting better, you’re not very bright.
Harry, are you really Bil Bonner, palying the Mogambo Guru…
Bernanke is a brilliant man? He is a criminal along with his fellow felons, Obama and Geithner. All three of them should be swinging from a gallows for treason.
That’s great. I’d like to see you try to handle that.