The Deep State Turns Citizens Into Zombies.

23.02.2017 • The Economy

Bill Bonner – Bill Bonner’s Diary (United States) –

BALTIMORE – The Dow, the S&P 500, and the Nasdaq remain near record highs… and are up about 10% since Election Day.

Fed officials say they could raise interest rates “fairly soon.”

Blah… blah… blah…

Learning Machine

Remember, the economy is a learning machine. So is a person.

We’re not talking about the kind of faux “learning” you do in school. Much of that is negative – ideas, information, and skills that destroy or delay real learning.

In fact, some people stay in school to avoid learning.

Learning can be painful, humbling, and hard. And only win-win deals teach you  anything useful.

Economist Adam Smith described the process more than 250 years ago. Willing buyers and sellers discover what things are worth (what someone is willing to pay). This information directs – like an “invisible hand” – investors, producers, and consumers.

Result? More wealth (or, in other words, satisfaction).

This learning metaphor is more useful than we thought: How do you learn? By trying. When do you try? When you have to.

Why does extreme poverty persist in Baltimore and other places?

Because the feds pay people not to try… and not to learn.

Why do rich kids often get nowhere in life?

Because their parents give them money; they don’t have to figure things out for themselves. They spend; they don’t learn.

Why does the U.S. economy stagnate?

Because fewer people are learning. The zombies don’t have to learn. The cronies learn the worst lesson of all: that crime pays.

Win-Lose Deals

Today, smart mommas want their babies to grow up to be Washington lawyers or Wall Street bankers or crony hacks.

That’s where the stolen money is… and they know it. But that is not how an economy learns.

Those are win-lose deals forced onto people by regulations, legislation, and the fake-money system. Some people win; most people lose. Those who aren’t in on the larceny get stuck in lower-paying, lower-learning jobs.

They’re at the checkout counter at Sheetz gas stations in Virginia. Or clearing away trees from the power lines in Ohio.

Or they have no work at all…

Economist Nicholas Eberstadt at the American Enterprise Institute think tank:

Between 2000 and 2015, according to [government statistics office the Bureau of Economic Analysis], total paid hours of work in America increased by just 4% (as against a 35% increase for 1985-2000, the 15-year period immediately preceding this one). Over the 2000-2015 period, however, the adult civilian population rose by almost 18% – meaning that paid hours of work per adult civilian have plummeted by a shocking 12% thus far in our new American century.

What do you learn when they have no work to do?

Not much.

According to one study, unemployed adult Americans dedicate 2,000 hours to TV and the internet a year. You learn by satisfying demanding customers and impatient bosses; you learn nothing from watching TV or surfing the web.

Druggy Stupor

But it could be worse. And it probably is…

Our brother-in-law, a retired preacher, enlightened us.

“I couldn’t believe it. I’ve been telling everybody that we live way down here in the rural Virginia mountains… and how nice everyone is. It’s just like The Andy Griffith Show.

“But then the police showed up and arrested everyone in the house down the road. They were running a drug business. They had more than $100,000 in cash. Imagine… here in Nelson County.”

According to the DEA, in 2015, more Americans died from drug overdoses than from traffic accidents or guns. Washington spends trillions of taxpayer dollars to stop terrorists. But that year, Americans were 3,096 times more likely to kill themselves by drug overdose or suicide than to die in a terrorist attack.

The president’s Council of Economic Advisers tells us that about half of all working-age Americans without jobs are on some form of drug – either prescription or illegal.

Where do they get all these drugs?

From the feds, of course. Eberstadt continues:

Of the entire un-working prime-age male Anglo population in 2013, nearly three-fifths (57%) were reportedly collecting disability benefits from one or more government disability program in 2013… As [Sam Quinones’ book] Dreamland explains…

[The Medicaid card] pays for medicine – whatever pills a doctor deems that the insured patient needs. Among those who receive Medicaid cards are people on state welfare or on a federal disability program known as SSI [Supplemental Security Income]… If you could get a prescription from a willing doctor… Medicaid health-insurance cards paid for that prescription every month. For a three-dollar Medicaid co-pay, therefore, addicts got pills priced at thousands of dollars, with the difference paid for by U.S. and state taxpayers. A user could turn around and sell those pills, obtained for that three-dollar co-pay, for as much as ten thousand dollars on the street.

How much can you learn when you’re in a druggy stupor?

Probably not much.

Zombie Effect

Another place you can’t learn much is prison.

The U.S. has about 5% of the world’s population. But according to the International Centre for Prison Studies, it has about 22% of the world’s prison population. America has more people behind bars than any other nation – about 2.3 million souls.

Shuffling around their cells… following orders… what do they learn?

Fake money produces much the same prison-like zombie effect on the economy. It dulls the senses. It cushions the pain of failure. It lulls people into not trying.

Where’s the real learning done in an economy?

In new businesses. Those are the ones with the new ideas, new models, and new products. Each one is an experiment. If successful, they grow and hire people.

But the rate of new business formation in America has collapsed. It is now only about half of what it was in 1978. A recent World Bank study puts the US in 51st place for the ease of starting a business. That’s behind the Ivory Coast, Afghanistan, Ukraine… even France. By comparison, Canada ranks No. 2.

But there’s more to business than just starting one. The World Bank study also shows that the U.S. is still near the top in at least one category – “Getting Credit.”

Yes… when it comes to making fake money available to people who can’t afford to pay it back, the U.S. is still among the best.

But wait… The fake money flows to the big boys, not the startups. They use it to keep out entrepreneurs. And their revolving-door contacts in the regulatory agencies also help prevent competition.

Learning is stifled.

Regards,

Signature

Bill

-Read more at bonnerandpartners.com-

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