Productivity has been rising steadily for a long time in the US. And yet, since 1973 that rise and the rise in wages has diverged.
So what happened around 1973 that might have caused that? In 1971 the US stopped making the dollar convertible to gold.
Two things are killing us. Fractional reserve banking and a central bank that charges interest. Fractional Reserve Banking multiplies the money supply. If the multiplication is enough to equal the value of all assets, the banks eventually wind up owning everything.
To keep this scheme running the Central Bank has to keep increasing the money supply so the interest can be paid. There are also other tricks.
We have about run out of tricks.
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12 responses to “Fiat Money”
A lot of other things happened ca. 1971, OSHA, EPA, the full elaboration of Great Society welfare state, a general massive expansion of government. It’s almost as if Republican presidents signing on to any and all Democrat social policies in order to buy support for their foreign policy wasn’t such a good idea after all.
In effect, the end result of decades of Democrat s0(1alist programs was the actual workers get paid proportionately less.
As one old Jew remarked in Dr. Mengele’s waiting room, “well, at least we get free health care”.
How do you overthrow an entrenched bureaucratic regulatory state? Presidents can be unelected; kings can lose their heads and so on. Much as I find hanging every last bureaucrat with the guts of every last priest tempting, it’s just not going to be practical. Maybe 10% or so pour encourge’ las otras.
The only thing Fiat money is good for is purchasing cheesy Italian cars.
Wages stagnated (declined for the working class) largely because of increased labor supply: women entering the work force, automation, off-shoring manufacturing, free trade, and both legal and illegal immigration.
Fractional reserve banking has been around since the Middle Ages. The only alternative is for the banks to charge you fees to store your money. That in fact was common up to the Middle Ages. It takes money out of circulation and depresses trade.
Going off the gold standard was a boon to governments because it allowed debt run up. The fact is there is not enough gold in the world to run an economy of any size, certainly not the one we have now. There is not even enough gold to redeem much more than one-half percent of all the gold certificates that have been sold to investors.
See also _Losing Ground_ by Charles Murray. He looked at the statistics of blacks entering the middle class, decline in poverty and illegitimacy, marriage rates and so on. For this data set the clear break point is a few years earlier, around 1966 Before that blacks were rising, albeit from a much lower start, at a faster rate than whites. After 1966, not so much.
“But…the standard of living must be going up. I mean, look at all those cheap
gew-gaws, tchotskes, gimcracks, designer schmatas and smart phones anyone can afford. And a grande half caff soy caramel carob mocha latte to go, mom is finally letting me get cable in the basement”
now you know what the term capitalist wags slaves mean. see thomas maulthus iron law of wages. go bernie!
Malthus was sure that a lot of dead people was the solution.
Guess what. Folks with guns will be the last to go.
Dogs are wag slaves.
simon white trash with guns are not stopping what is going on now. now if black citizens were armed that would be different. that is why their is strict gun control in black areas.
A year-old article over at the Heritage Foundation shows that productivity and hourly compensation rose at about the same rate when non-cash benefits are included.