Purest Shit: The Ruling Ideology in 60 Seconds

John Snow With a twinkle in his eye, former neo-robber baron, safety slasher/multiple murderer, and U.S. Treasury Secretary John W. Snow tonight offered the pithiest, purest statement I’ve ever seen of the central claim of our market totalitarian overclass and its bi-partisan political puppets.

To see it, click here, navigate to the video for October 11, 2010, and view the minute from 7:40 to 8:40.

This is indeed, as Snow says, “the theory.”  It is the innermost dogma of supply-side economics, which is business investors’ unwavering self-worshiping insistence, the facts be damned.  In this context, Snow is relating it to the Federal Reserve’s policy, but “the theory” rules all spheres of economic policy in this age, the White House distinctly included.

The great point of falsity, of course, resides in the phrase “lots of people’s household wealth.”  What percentage of the population bases its spending levels on the value of stocks?  Infinitesimal, because an infinitesimal percentage owns enough stocks to matter at this level.  And the few who do?  They save and reinvest a huge share of the income gains they constantly receive.

Alas, all decrepit, outdated ruling classes have long since grown incapable of distinguishing their own circumstances and interests from those of everybody else.

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9 years ago

The point of lowering interest rates is to boost spending, not drive investors into riskier assets. The attractiveness of saving is lower at lower interest rates.

I have heard this investment boost distortion many times.

Michael Dawson
9 years ago

The basic claim is that giving more money to the already wealthy will cause the wealthy to spend and invest. Interesting, Snow doesn’t even mention investing, because he doesn’t want to acknowledge that efforts to boost stock prices meaningfully affect 2 percent of the population at most. Supply-side is one of history’s most tested and disproved theories at this point, yet it’s the only thing the overclass will ever say, for obvious reasons. In reality as Alan Blinder remarked to Business Week last month, if the economy grows at one and a half percent, we’re spitting in the wind because… Read more »

Luis Cayetano
9 years ago

Is this what Keynes called a “liquidity trap”?

Michael Dawson
9 years ago

Yes, I believe so, Luis. If there is no growth in the purchasing power of ordinary households, capitalists can have all the money in the world, and they will still have no reason to invest it in expanding production. Giving more chips to the winner of the poker game doesn’t restore the losers.

But, ruling classes never voluntarily give up their wealth and power. They don’t even allow the topic to be discussed, in fact, as we can see, for instance, by watching the farcical “elections” now going on here in the USA.

Would love your thoughts, please comment.x
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