Thursday, July 23, 2009

Norberg - an idiot?

Johan Norberg is a Swedish freelance writer and a Senior Fellow at the Cato Institute. He normally argues for classical liberalism, free markets and globalization. His blog (mainly in Swedish) can be found here. He is also an author of the magnificent ‘In Defence of Global Capitalism’ which anyone interested in free markets and the debate about globalization should have in their bookshelf.

9 times out of 10 I will agree with Mr Norberg on most subjects and the only times we are not really in agreement it is about semantics or details. I’m, however, a more straightforward fellow and say things less politically correct and I believe more in direct action i.e. not wimping around. His analyze that media always focus on negative news and that journalists clearly spin and even make up some or most of the news is completely correct. He is arguing, and rightly so, that most of the 20th century has been beneficial for humankind and despite World Wars, communist regimes and horrible protectionism; capitalism have still managed to lift hundreds of millions of people from poverty. The freer a country has been, the more the economy has grown. The more capitalism; the more riches is created. All this is good and all and his earlier contribution in making people understand and come to grips with realities of this world is not in question, however, his current book (which lack some insight and would benefit from a further analysis) and his insufferable optimism about the future is.

As mentioned, most of the time I agree with Johan, but in this case he is wrong and not a little wrong either, he is totally off base. Reading his latest book I cannot help to wonder where the long term analysis is and what happened to looking towards the past as well as towards the future. Does he know what really going on in America? And I’m not only talking about the economic situation (where I would have liked to have seen a deeper investigation in his book) and the Obamination’s idiocies, no; I’m talking about growing movements that’s actually threatening the very core of the US. Three main ones I would like to mention. The first one is the leftie one that’s in full support of Barack Obama and more or less follows him blindly whatever he does. Obama could establish concentration camps, start wars and impose 100% taxes and those idiots would still follow him. The other one (that I bunch together, sorry…), which gets more and more resentful - and even aggressive - is made up of religious nut-jobs, libertarians, disillusioned ex militaries and hard-core conservatives. All of which do not need much to be pushed over the edge. The American government has classified these groups as possible “terrorists” and labeled ‘em as “violent” and if you believe in things like the American constitution or Ron Paul; you are a danger to society. Even if a rebellion and/or a civil war is highly unlikely (the federal police would strike down and kill anything that moves) the resentment, however, is real. The third, and biggest group, is those that mainly belong within the right side of politics and believe in America, but love the welfare founds and the government fixing things even more. These people will vote for whoever is promising the most and will loath both the right and left extremists. There is one big problem with this last group though; they are getting poorer and poorer for every minute that passes. And this is the next thing Norberg is missing, America is not only totally broke, she has no real production capacity. And even if she manage to conjure up that magical entrepreneurial spirit and start producing again, they have that 15+ trillion dollar debt, a currency that is worthless, a high probability for hyperinflation and a regime that is fixated on doing what is wrong.

No Johan - if nothing drastic doesn’t happen very soon; America is fucked for a very long time, possible forever. Johan is right, there is something about the US that still makes you believe in that country, but it is soon too late.

The next and even stranger notion coming from Norberg is that he sees the media focusing on the negative things about the economy- this also today. I wonder how he comes to this conclusion… In fact; the truth is that media is doing the complete opposite. We are not being told about the enormous debt accumulations and what those means for our future, we are not warned about hyperinflation, artificially low interest rates, bubbles in the economy or real-estate rallies. I cannot mention a single journalist that has questioned the trillions upon trillions of dollars being printed plus borrowed and then thrown into the economy. Hardly anyone is mentioning IMF that is spreading the inflation and stupid policies about. If you read the news about some company showing less losses or slightly better profit than expected this is celebrated as a “good sign”, the company might be going down the drain, but media is saluting it all the same. Stock-markets that are going slightly upwards thanks to artificially low interest rates, trillions of inflation money, over confidents and massive bail-outs is also regarded as “green shoots”. And finally, as a historian and having an interest in economy, John Norberg should really focus on how our economies is built today, think about credit cards, check out M1, M2, M3 and calculate the long term risk and weigh in how the general public is reacting and will react.

Just ask yourself the following questions:

What will governments do next when the bail-outs and stimulus haven’t had the effect they were hoping for?

What will we see when riots grow and demonstrations are going on every month/week?

How can central banks act now? Increase interest rates and crash the economies further or print more money? This is the only two options they have. What will they choose and where will this lead?

No Johan, for once you are wrong, this time there isn’t any happy near future. It is possible that we come out of this (10 years or so from now) with our heads high and is better off for it, tens of millions might die and the world will never be the same again, but we might very well make it. But if you think the worst is over or things soon will look up again, you are as stupid as the rest of the baboons in this world. Socialism, statism and Keynes rule the world at the moment and this will not change anytime soon. On the contrary, those stupidities will inflate like a Weimar (or Bernanke) printing press.

In the very short run we will see slight improvements because the inflationary money and the spending spree will trick people (today), but in reality, under the surface, we are worse of today then for a year ago and much worse than two years ago. In a couple of month’s time we will be in such a disaster situation that I cannot see how we will ever get out of it. We are screwed beyond all comprehension and you better wake up and smell the apocalypse.

There is, of course, a slim chance I’m wrong, but the numbers and the facts don’t say so. I truly hope I am wrong, but if I’m not, you better do what I’m telling everyone else, get a gun, stack up with dried-up food packages, and buy candles, gasoline and so on. These things will come in handy even if I am wrong, so please buy them.

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