In
the first chapter of Capitalism, I wrote, “In the absence of a
widespread, serious understanding of the principles of economics, the citizens
of an advanced, division-of-labor society, such as our own, are in a position
analogous to that
of
a crowd wandering among banks of computers or other highly complex machinery,
with no understanding of the functioning or maintenance or safety requirements
of the equipment, and randomly pushing buttons and pulling levers.”
Those words describe the recent actions of Congress in enacting
multi-trillion dollar legislation the alleged purpose of which is to offset the
loss of trillions of dollars of sales and incomes caused by the imposition of “lockdowns”
allegedly required to combat the coronavirus.
What Congress has done is not provide any kind of genuine relief
for the damage caused by the lockdowns, but rather added to that damage. It has
added to a massive forced reduction in the supply of goods and services a
comparably massive increase in the quantity of money.
The consequence of this will be that when the economy recovers
from the lockdowns, it will face a major increase in the quantity of money and volume
of spending, which will substantially raise prices. Tens of millions of elderly
people will suffer a major loss in buying power.
What will Congress do then? Create still more money to “bailout”
the elderly? As the Constitution makes clear with respect to the power of the
states, the Federal government too should have no power to make anything but
gold and silver coin or bullion legal tender.
That would protect us from further arbitrary
increases in the quantity of money. It would prohibit all new attempts to
destroy the buying power of money in the delusion that in doing so, one is
rescuing the economic system.
P. S. The Destruction of Hospitals
Since mid-March, elective surgeries have been radically reduced in
anticipation of the need to make hospital facilities available for a flood of
coronavirus patients that never materialized. The revenues lost from these surgeries
have threatened the solvency of hospitals.
How is it possible for such policies to be continued? Are hospital
managements robots, unable to change decisions that have been proven wrong? Or
are they working under orders from robot-like government officials, who have no
financial stake in the fate of the hospitals?
