Sand In The Gears

Unless you’ve been living in a cave, you’re aware that all of the Great Thinkers are worried about the economy. Unemployment is a concern. Deflation is a concern. Now an economist is prescribing high inflation as a cure!

Behind all this is the presumption that government can manage the economy. If that’s true, then governments around the world are extraordinarily inept. The fact is, the economy manages itself – all government can do is pour sand into the gears. The political debates are about how much sand and what color it should be.

There is little hope that governments will get smart and leave the economy alone. Voters wouldn’t stand for it. Voters will be punished. My own forecast is that the punishment will take the form of inflation – perhaps wild inflation like we had in the 70’s. Perhaps worse. But don’t put much faith in my forecast. Politicians may be inept, but they are also creative. They may yet find new and exciting ways to ruin the economy.

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