[This article originally appeared in The Daily Reckoning on July 11, 2013]
“You guys seem to have forgotten how the economy nearly collapsed,” writes one indignant reader. “What kind of freedom do the tens of millions of Americans living in abject poverty have? When the government of the people tries to ameliorate the suffering and level the playing field, ‘they’ start whining about how the government is taking away their wealth.”
Ha. Ha. Ha!
After forecasting a demographic meltup, here, a housing collapse, here, a debt crisis, here, we clearly failed to notice that the economy nearly collapsed.
How did we miss it?
As to the rest… allow us to further confuse you with an allegory:
“Long ago, in early August of 2007, a trillion-pound Yeti named Sun Po Tai descended on Lower Manhattan. The monster, hungry, began eating all the pigeons between East 14th Street and Battery Park. Perhaps you’ve read the news accounts…
“Two investigators were summoned by Mayor Bloomberg to assess the crisis: one a Nobel laureate from Princeton, the other a lowly scribe for The Daily Reckoning.
“The professor arrived early and saw the pigeon population was dwindling… soon the Yeti would eat something a bit more… human. It would be devastating.
“So in an effort to ‘ameliorate the suffering,’ or at least the potential suffering, of the good people of Wall Street, the professor filed a recommendation with the mayor… and followed up with a barrage of newspaper columns suggesting that the government hold a $152 billion bond drive to purchase more pigeons for the Yeti to eat.
“‘Maybe he’ll leave once he’s had his fill,’ the professor reasoned, quite reasonably.
“The people rallied, the bonds were sold — some were bought by willing partners overseas — the pigeons were bought and the Yeti ate them one by one until they too were all gone.
“But Sun Po Tai didn’t leave…in fact, he now weighed 2 trillion pounds.
“The professor stuck to his guns. He filed a new recommendation and wrote more Op-Eds and encouraged the purchase of even more pigeons: ‘$85 billion worth per month… that ought to do it. The central bank could even buy them up. Whatever it takes to get this the monster to leave.’
“Some people thought, Hmmn… the Yeti doubled in weight pretty quickly… are we just feeding the beast? But the professor wrote for a prestigious column in the city’s paper… and he had a Nobel Prize pendant around his neck. ‘He must know what’s going on behind the scenes,’ they reasoned. So they shrugged and went along…
“Around that time, the lowly Daily Reckoning scribe finally showed up. He got a look at the pigeon carcasses in Battery Park. Saw the footprints Sun Po Tai had left in the playground near Ground Zero, where his kids used to play. Not knowing what else to do, he stepped into an Irish pub called Mick’s for a glass of pinot grigio.
“The only seat available happened to be next to a bespectacled fellow who resembled the old cartoon character Mr. Magoo. The strange man had his nose in a pint and was mumbling something about Kondratiev waves and the True Money Supply…
“‘Drat!’ the scribe heard him say. ‘Savings represent the future!’
“‘What’s troubling you, mister?’ our friend the scribe asked, concerned about his fellow man, as always.
“‘It’s all a big mistake,’ Magoo grumbled back. ‘One we can’t escape.’
“‘What is… the Yeti?’ the scribe asked. Then he wondered aloud, ‘Has anyone found out where it came from in the first place?’
“‘Yeah,’ Magoo replied, brandishing a name badge from the Department of Health and Human Services. ‘An experiment gone awry… a government bionics program designed to manage the risk the pigeons posed to public health. Little buggers crap all over the place.’
“‘Hmnn…’ The scribe took a sip of his wine. ‘But aren’t we now printing money…to buy debt…to buy more pigeons?’
“‘Exactly,’ Magoo grumbled, taking a sip of his beer. ‘We would have been better off just leaving them alone…’ His voice trailed off.
“‘Hmmmn…’ The scribe left the city.”
We’ll give you a few moments to savor the irony.
Peter Coynefor The Daily Reckoning
P.S. The severity of our current financial crisis is only made more dangerous by the unfortunate leaders who are trying to fix it. But that’s why we write the Daily Reckoning. To help you make sense of it all, and hopefully offer you a solution or two. Readers of the Daily Reckoning email edition — where this piece originally appeared — have regular opportunities at real ways to protect and grow their wealth, every day. Sign up for the DR email for free, right here, and start receiving those offers for yourself.
The 2008 financial crisis knocked the global economy to its knees and shook everyone's faith in the markets. Why didn't anyone see it coming? Well, as it turns out, economists cannot predict the future. But since most economists believe they can, economic misery often lurks just around the corner. Bill Bonner explains...
Peter Coyne is the managing editor of The Daily Reckoning. He received his degree in economics and political science from Loyola University Maryland where he studied under the Austrian economist, Tom DiLorenzo. Before joining Agora Financial, Peter worked in Congress for Dr. Ron Paul until he retired in 2012.
they have no more money to feed the pigeons the Yeti will starve and then the
few people who kept pigeons locked up in their apartments will let them out and
the pigeons will again multiply.
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