#154 Predicting the Future
Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Google Podcasts | RSS | More
#154 Predicting the Future
Christians should look forward to the future with great anticipation. Of course the future is uncertain, but that’s what gives us economic freedom.
Predictions are difficult, especially about the future.
That quote from Danish physicist Neils Bohr was about the uncertain future use of nuclear power. But, it certainly applies to economic forecasts. Almost everyone on Wall Street and in Washington got 2022 wrong. Well, economically, the folks in Washington are not supposed to have anything to do with the economy, and until about a hundred years ago, they didn’t. Try finding a newspaper article from 1910 about the economy that blames ANYTHING on the government. It just didn’t happen. The economy was seen as a force of nature that humans could not control. Then with Economic Humanism, which I explain in podcast #21, we decided that WE were in charge of the economy.
It’s correlational, and maybe it’s causal that the founding of the Fed in 1914 – which was supposed to deal with monetary policy – coincides with the growth of fiscal policy. The founding of the Fed was followed by severe regulatory fiscal policy from Franklin Roosevelt, who essentially stole power from the legislative branch to empower the presidency.
Securities are not Secure
“Secure” came into English in the 1530s, from Latin securus. When applied to persons, securus could mean “free from care, quiet, or easy.” The original meaning in English was “free from danger.”
Initially, the word was applied to property pledged for a loan. That’s logical because the property was intended to make the loan “free from danger” to the lender. Somewhat later the word began to be applied to evidentiary documents verifying loans and collateral, and eventually, all documents that proved financial rights. Okay, you have a secure LEGAL right to the property in a limited liability corporation, but there is no FINANCIAL security. Anywhere, anytime, as a matter of fact. It’s just a fact of human nature. Nothing is secure, except of course, most Christians view our salvation as secure. But, we still use the word “security” in finance. Collateral is security for a loan. Stocks and bonds are securities.
Since we have a human nature that demands security, it gets supplied by many things in life: Money, stocks and bonds, relationships, and self-esteem. But none of those are secure. People find happiness when they learn to live in that insecure environment.
The generation of my sophomores at Dallas Baptist University are the richest generation ever. I mean…..in the history of the world. There has NEVER been a richer generation. Then why do they feel so insecure? And by “they” I mean the generation. Why do 22% of them report that anxiety affected their academic performance? It’s because of today’s topic: They are unable to predict the future.
Currencies are called notes. During the Gold Standard, they literally were notes. The British currency is called the pound because it represented a pound of silver. The Polish currency is called the Zloty because the word means “gold.” How about the dollar? It’s from the low German word “daler” which means a coin made from silver from the Joachimsthaler silver mine in what’s now the Czech Republic.
But, when you decouple the currency from a material of sound value, you give humans the power to debase it. And, they have. We call it inflation, and that’s what we’re experiencing today. Fed Chairman Jerome Powell said that inflation may not have peaked. Yikes! It was 8.5%, then 7.1%, and he is warning us, it may go UP again?!
More bad news. The Social Security Administration estimates they will run out of money by 2035. Better economic data is being used by the Congressional Budget office, and they say it’s more like 2033. Here’s a key sentence about Social Security: Social Security’s future is not secure. SECURITY IS NOT SECURE. OK. That always seems to happen when fallen humans are involved. My next book might be an explanation of the government programs that are not Biblical. Social Security will be the first subject analyzed.
Debt is Unsustainable
A headline announced, “The massive global debt load is increasingly unsustainable.” I’ve been saying that since my very early podcasts. One of my early podcasts, #8 is titled National Debt. Of course national debt levels are unsustainable. I used to lead some seminars for CPAs. I showed up one morning in Pittsburg, the week the Pittsburgh Penguins went bankrupt. The attendees at my seminar were acting like stereotypical CPA’s, being very quiet and demure. So, to try to start a conversation, I looked up from my newspaper and asked, “How did the Penguins go bankrupt?” There was no response. I waded in again, “How did the Penguins go bankrupt?” One of the CPA’s said very slowly and carefully, “Expenditures exceeded revenue in the long term.” He explained the current national debt. Expenditures are exceeding revenues in the long term. That is unsustainable. But as I’m recording this, Congress is considering another $1.7 trillion blowout spending bill. Why do they do this? Well, because they can. They’ve figured out how to spend without paying for it. “Don’t Steal” was law #8 for Moses and it’s one of the Ten Biblical Commandments of Economics that I found while writing the book Biblical Economic Policy with Sergiy Saydometov.
Congress spends because they have the control mechanism to do so. They are securing the present at the cost of the future.
The loss of Freedom
A free market is where everyone votes. Fiscal and monetary policy remove freedom from the market, and place the power in the hands of a few falsely anointed leaders, who think they can secure the economy. They can’t.
Recently, Chairman Powell made an announcement, and the stock market went up 1.5%. That’s not the market. It has been taken over by economic humanists who are trying to control how goods and services are produced and distributed.
Don’t Fear the Future
That’s the title of my most watched podcast #88. I think it’s because it hits at the heart of economic policy: Trying to predict the future.
Karl Marx said religion is the opiate of the masses, and that people should be free from it. What did he suggest as a replacement? Labor unions as security. This week, unions are strangling the freedom of the British people to distribute healthcare. How’s that working out for the Brits? Where’s the freedom in that?
Daniel Yergin has an article in the WSJ about the economic effects of Russian oil. The article reminded me of his ground-breaking book with Joseph Stanislav titled The Commanding Heights. They explain that Britain was crippled by strikes in the 1970’s, and that’s what brought Margaret Thatcher to power. Seems like the Brits have not learned much about economic freedom in the last fifty years. History is repeating itself. They sought security in unions again, and it has failed them, again. I have more to say about this in podcast #52 titled How Unions Cause Dis-union in the Union. Unions are UN-UNITING the United Kingdom.
So many movies follow the theme of time travel, when someone goes into the future. The reason they do it in movies is because you can’t do it in real life. See, that’s the power of both Christianity and Economics: Christianity is a religion that takes life as REALITY, and economics is an academic system that studies the production and distribution of products and services in the REAL world.
As Screwtape said to Wormwood in The Screwtape Letters, “Get the patient to worry about the future.” But we should not fall for the devil’s lies. As we begin 2023, let’s look forward to the future with great anticipation and delight. Of course, it’s uncertain. That’s what gives us economic freedom, and that’s what makes it challenging and fun.
Tell the Truth
Earn a Profit
Read along with #TheChristianEconomist:
- Biblical Economic Policy | https://amzn.to/3nn8inO
- #21 Economic Humanism | https://bit.ly/3HtgCwy
- Jerome Powel on Inflation | https://reut.rs/3Z5xkIF
- SSA Depletion | https://bit.ly/3jP3xnf
- Massive Global Debt Load is Unsustainable | https://on.wsj.com/3Q95tmU
- #8 National Debt | https://bit.ly/3VNnGHD
- $1.7 TRILLION Spending Bill | https://bit.ly/3Z5zjg5
- Biden Signs $1.7 Trillion Bill to Avoid Shutdown… | Time | https://bit.ly/3QbYiKE
- #88 Don’t Fear the Future | https://bit.ly/3RDAqP6
- Putin Can’t Count on the Global Oil Market | WSJ | https://on.wsj.com/3VJsNcb
- The Commanding Heights | https://bit.ly/3GDItcG
- #52 Unions Cause Dis-Union in the Union | https://bit.ly/3GByjct
- UK Health Union Strikes | https://reut.rs/3WKigyv
- The Screwtape Letters | https://bit.ly/3GfDFc0