"It will accumulate: moreover, it will reach a head; for the first of all Gospels is this, that a Lie cannot endure for ever." - Thomas Carlyle, The French Revolution
"As indicated in today’s policy statement, the economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the Committee had expected, and some recent labor market indicators have also been weaker than expected." - Ben Bernanke, 7/22/11 Press Conference
If one simply points out that there has been no recovery, one is liable to be taken for a biased observer. Those who believe that things are bad--as indeed they are--fail to note--or so we are told--how much worse things would have been had the Federal Reserve and the U.S. Government not acted as they did. This is intended as a serious rebuttal. Yet the very impetus for doubling the monetary base, coupled with the largest stimulus program in the history of civilization, was the fear that without such drastic measures the world as we know it would have descended into violence and chaos. It follows then, that so long as the world stands, the stimulus worked. Only when the apocalypse is upon us will we be able to second guess the wisdom of recent monetary and fiscal policy.
This is convenient for the architects and advocates for said policies, but it's hardly a persuasive argument, especially since there is no proof that the collapse of the housing market would have resulted in Armageddon. Iceland did not pursue the same policies as the Americans, but--as yet--its citizens have not resorted to cannibalism or virgin sacrifice. Whether or not economic stimulus is helpful, then, we know that civilization may continue without it. We will never know how America would have fared had our politicians not proceeded to give billions to bankers and spend borrowed money on dubious political products. All we can say is that we did those things and that the economy is still doing very poorly. We cannot empirically verify that the policies of our government caused the economy to worsen--though we could demonstrate theoretically why it may have done so--but we can emphatically insist that the recovery has not been delivered as promised.
Ben Bernanke is an academic. Recently, he has learned that the neat theoretical world of Keynesian macroeconomics is quite different from the messy world in which he finds himself head of the central bank of the United States. Yet being an academic, it is unlikely that he will alter his beliefs in the theories on which he has expounded for many years. He knows that what he did was right and that the economy should be recovering. He also knows that the economy is not performing as expected. This disparity between reality and his theoretical models can be explained by temporary factors, such as "the aftermath of the tragic earthquake and tsunami in Japan." In fact, it has to be explained in this manner, for his theories cannot be wrong.
Bernanke also points out that: "consumers’ purchasing power has been damped by higher food and energy prices." He offers no word on what may have caused the prices of food and energy to rise, which is to say, he's not about to finger the Federal Reserve as the sole vehicle of inflation. His charts show that inflation is under control, so increases in food and energy prices must be... temporary.
Bernanke's problem is that temporary is becoming more permanent. The sycophantic media believes that he saved the global economy, so they will continue to give him the benefit of the doubt. But we are still something of a Republic, so the people believe their opinion about these sort of things matters. Most Americans have not heard of Bernanke; fewer still have heard of John Maynard Keynes, the defunct economist to whom the Federal Reserve Chairman is a slave. Yet they know when prices go up. They know when jobs go away--and when they don't come back.
Since both parties are enthrall to the corporations and banks at whose behest the stimulus was passed in the first place, prospects for a drastic alteration of fiscal and monetary policy are not good. Some of the tea party candidates show indications of an independent streak, but with the Republicans set to capitulate and raise the debt ceiling in short order, it's save to say that the moneyed interests who caused the housing bubble and also benefited from its bursting, still very much rule the United States.
Which brings us, at long last, back to Carlyle. There are very real limits to how long a lie can be told. In a sit-com, the truth is propounded by the end of the half-hour episode. In the real world, a lie can masquerade as truth for much longer, yet it will eventually break under the weight of its own contradictions.
The Government cannot forever print money for billionaire bankers, thereby impoverishing the rest of Americans, all while insisting that we are on the road to a recovery. I do not say this because I think Americans as a people are extremely intelligent and thus difficult to dupe. On the contrary, in our present state of torpidity, the flicking of television sets has caused us to be duped for a considerable period of time. Yet, as Louis XVI discovered, it is an unwise policy to expect that which is dormant to remain thus forever. Poke him enough, and even the laziest of dogs will awake and attack. And, although he often gives cause to make us forget, man is nobler than any beast.
One cannot mention Carlyle and the Revolution in France without clarifying one's position regarding the prospects of another. At present, the American people, or those that pay attention to these sorts of things, are distracted by the political circus in Washington. The conservatives labor under the illusion that ousting Obama will somehow right the ship of state while the left, with equal lack of sense, believes that handing over the Executive to a Republican would render significant harm to the nation. Comparatively few realize that electoral politics are a mere diversion at this late stage of the Republic. Once the people realize that they are powerlessness to affect reform through official channels, we move one step closer to revolution.
So, for awhile at least, we will remain as we are. But the lies are mounting, moving us closer and closer to a precipice. In a subsequent post, I'll try to flesh out this idea more fully, but for the moment it pays to watch the narrative as constructed by the media to defend government policies and the reality, insofar as we can grasp it, as documented by various marginalized media outlets. The tension between the narrative and reality will become more strained as the former is exaggerated to compensate for the inability of stubborn reality to conform. The days of these particular lies are numbered.