By Lisa Beilfuss April 10, 2020 10:54 am ET
Consumer prices dropped in March at the fastest pace in more than five years, early evidence that the coronavirus is launching the U.S. economy into a period of deflation—a potentially damaging and self-reinforcing cycle of declining prices.
The Labor Department said Friday that the consumer-price index fell 0.4% last month from the previous month, pushed lower by a sharp decline in energy prices. The CPI’s energy basket fell 5.8% from February as gasoline prices slid 10.5%.
The conservatives, libertarians, and Boomers – like Z-Man – all say that we can’t have UBI because it will cause inflation.
These same conservatives, libertarians, and Boomers – like Z-Man – were happy with Trump’s record high stock market – which was, of course, the inflation from the money printing.
Now, due to over-leverage, all that money that was printed, via the financial system, is going “poof” as the rolling defaults begin. The Fed, the Treasury, are all printing money as fast as they can to try to replace the disappearing money.
With ZERO inflation in sight, and the quantity of money decreasing, not increasing, all of a sudden libertarians and conservatives – like Z-Man – are in a panic that giving people a thousand dollars is “printing money” and instead they want to saddle the consumer, the taxpayer, and the government with more debt.
This is an ideological fixation based on the religion of libertarianism and Alan Greenspan’s failed monetarism.
https://en.wikipedia.org/wiki/Monetarism
https://en.wikipedia.org/wiki/Chicago_school_of_economics
It seems highly doubtful that Z-Man, the libertarians, and most conservatives even know the dogma they spout – other than some slogans, they don’t really have any understanding of the ideologies.
You’ll notice too that they are always engaged in moralizing. They talk a lot about “hard work” – they are the only ones doing “hard work” – and lots of Sunday School lessons about fairness. They typically resort to “racism” to sucker pro-whites by appealing to their vanity. “Don’t have UBI because then Tyrone will get free malt liquor! Instead, keep printing money to give to Schlomo to keep the stock market high!”
Consider: oil, thus gas, is at historically low prices right now. What is the “solution” to the “problem” of cheap gas? All of a sudden the libertarians and conservatives are siding with Al Gore and want to make oil more expensive by cutting production!
Conservatives and libertarians do not make economic arguments, they give moralistic Sunday School lectures they have read from “conservative” pundits who were paid by the financial industry to make those moral arguments, to justify their own bailouts and socialism.
Libertarianism, especially Austrianism, is even worse – it is basically a false opposition based on magical thinking about gold and a basic misunderstanding of psychology.
Forget Mises, if you want to understand economics, read Thorstein Veblen
Banned Hipster 
Correct: print money or watch it disappear. Those are the choices.
Economy runs on faith though, not money: it is a spiritual phenomena.
You can print all the money you want but if no faith, no economic activity will result. Need to be optimistic about the future. Fortunately, the crash was a genuine correction, not the kick the can down the road type we have been used to. When the economy open up it will enter into an actual bull run. See Al’s Volcker and interest rate shocks if 1981.
Open immediately + 5000$ per citizen and we are off to the races.
PS Authoritarians created this catastrophe, should liberty get the blame?
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@Afterthought
There is no great light between the practical platforms of ideological libertarians and conservatives when it comes to the economy.
Ron Paul is right about the wars, he’s wrong about gold. He’s right about ending the lock-down, he’s wrong about money.
I get the point about “animal spirits” and the like, but we still have a savings glut.
The Boomer Ideal – sit on a stack of savings and watch it grow magically through usury/rent-seeking you call “investment” – that’s over.
One major reason we had all the mass immigration is because Gen X and the next two generations were much smaller than the Boomers. That means that the price of labor would go way, way up and the return on Boomer savings would go way, way down.
You have 200 million houses owned by Boomer, but only 100 million young Zoomer couples wanting to buy a house. What does that do to the price of housing?
Now Boomers have most of their savings invested in the houses, but now they can’t sell their house – there savings goes poof.
What about cars, the second largest expense? Car dealerships make more money on usury than on actual automobiles. That’s a GOOD THING – that shows that the auto manufacturing industry is super-efficient and the market is competitive. It’ the free market working.
Yet … conservatives and libertarians complain! Because there less and less room to rent-seek on the auto industry. The conservatives and Republicans went all in to make online car sales illegal – because the “small businessmen” that own car lots know they will go out of business. They have been made redundant, so they immediately turn to socialism.
That’s the conservative way. Libertarians are no different.
We’re going back to negative interest rates. That’s a good thing.
We live in an era of hyper-efficiency, high-tech, and abundance.
We do not need Boomer savings and investment anymore – and we can’t afford to keep paying their usury. We cannot afford their rent-seeking.
Take the rent-seeking parasite off our back, and the economy is hyper-efficient. We could have the 20 hour workweek and fly cars they promised 100 years ago, and soon as we deal with the usury/rent-seeker/parasite problem.
Conservatives and libertarians really believe that it’s the 1920s, money is in short supply and based on gold, and J. P. Mogran works harder than the mailman, thus deserves a trillion dollars.
It’s absurd. We can no longer afford their economic fantasies of Boomers and Conservatives/Libertarians.
Consider Silicon Valley angel investing: they have more money than investment opportunities.
When there is a high supply of something, and a low demand for something, what happens to the price? This is high school level economics.
So do we really need investment money? In a glut, do we need boomer savings? In an era when Wall Street takes on dollar of savings and leverages it into $100,000 of fraudulent AAA bonds, what happens when the real economy of goods and services reasserts itself?
All this stuff was hashed over in 2008 – even before the crash. The “FIRE Economy” is something like 20% of the GDP, when in fact, finance needs to be maybe one or two percent of the economy.
We don’t need capitalists anymore. There are no longer efficient. They are going the way of buggy-whip manufacturers.
Really, what does a capitalist actually do? It’s just a decentralized way of organizing human labor.
We have the internet now, a decentralized way of communication, which is how human organize.
Really – we have humored the white conservative boomers far, far too long. No one wants their suburban houses – should we import millions of non-white “immigrants” to buy the boomer’s suburban houses so they don’t lose money?
Should we continue imperialist wars and mass immigration to prop up a Boomer’s inflated 401k?
No, we should not. We need to take their car keys away from them, and they need to accept the fact that they are not NEARLY as rich as they thought they were.
Hopefully, they were very, very nice to their grandchildren, because we sure as hell should NOT import cheap Latina nurses to take care of them. That’s what families are for.
How much longer until they are deeply, DEEPLY, ashamed of those bumper stickers that said “I spent my grandkid’s inheritance.”
I’m not joking in the slightest bit. Conservatives – the “boomers” – the slightly upper-middle class whites, the core of the GOP – they are the enemy. They really are importing mass non-white immigrants to keep the illusion of their paper wealth going.
We cannot afford their lies and parasitism anymore.
Expect enemies of the people, like Z-Man, to squeal the loudest as we pull the parasite out.
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I don’t think the quantity of money faces any risk of decreasing. The Fed has made it quite clear that it will do whatever is required to avoid deflation, and they’re to be believed. Where all the newly-created money goes will depend on where investors deem returns to be superior. I’d think the very depressed oil and gas sector rather than the Teslas or Alphabets, but that’s just crystal ball stuff, not something that any theory can tell you.
Welfare or taxation doesn’t have anything to do with monetary policy.
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@bob saffron
Nothing has changed for the last 20 or so years. The newly-created money will go into propping up financial instruments. It certainly won’t trickle-down to the real economy of goods and services and the consumer, which has been in a quasi-deflation for years.
All the “returns” have been paper returns on financial instruments, the more opaque the better.
Nothing will change until primary producers start rejecting the dollar as a reserve currency. EU – really, Germany – has shown that they don’t have what it takes, so the Euro won’t work.
But if Russia and China can get their version of SWIFT going, and just enough secondary and primary powers start to reject the dollar, reserve status will end.
Imports in the US will be sky-high, but that just puts us closer to autarky.
Robots and high-tech means no hyper-inflation in the world of goods and services, in fact, constantly decreasing prices.
You would think this would be cheered by “conservatives” and “libertarians” but no – quite the opposite. Both of them are addicted to paper money and usury, both oppose the creation of actual value. Their entire goal is to rent-seeking on the productive – libertarians are no better than conservatives when it comes to this.
It’s a cultural thing.
You know what would fix a lot of our problems?
Islamic banking.
It was quite the rage in the financial press back in the 2000s. Unlike usury, it aligns the interests of savers/investors and producers.
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Any libertarian worth his salt would be aghast at the robbery by the Fed and the banking cartel. Stealing purchasing power through the printing print is worse than daylight robbery, which has the grace of transparency.
“Islamic banking” relies on the same casuistry that we are all too familiar with to get around religious strictures. Interest is merely disguised as commissions or equity.
https://www.citibank.com.my/english/islamic-banking/index.htm
I feel that hunger might actually see Malthus rehabilitated. There’s a huge supply shock coming to the suppliers of foodstuffs. Higher real, not just nominal, prices for food seem a given to me. Wheat, in nominal terms, is little higher now than it was at the 1980 peak.
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@bob saffron
Interesting how libertarians want to redefine well known concepts such as commissions and equity as interest, all in the service of justifying rent-seeking.
There’s a difference between comissions and equity, and there’s a difference between both and interest.
In both Islamic and Western societies, there is a long tradition and a lot of case law about all these subjects; libertarians want to instead deduce all these from “first principles” – which isn’t how human societies work.
It’s amusing see the Hoppe fans have long conversations about enclaves. Are the inhabitants of the enclave stuck? Is there some requirement that the owners of the exclave allow passage across their property to the enclave inhabitants, etc?
They think there are doing some sort of important thought experiments, when in reality there’s a huge amount of case law, tradition, and history that have already solved these problems.
But libertarians – who have only one book, so to speak – think they are going to figure out all of human history based on one single principle.
Hardly different than the college communists that say, “but communism has never been tried!”
There’s no reason that society needs to allow usury, or even compound interest generally. You don’t have the “right” to loanshark. There’s a reason all societies have banned usury in one form or another.
It’s impossible to take libertarians seriously when it always boils down to “the right” to, e.g., traffic heroin.
…
I bet that libertarians and conservatives will call this “inflation” – which they claim is a monetary phenomenon – instead of what it obvious is, price increases due to a massive collapse of supply.
I bet ZMan will say food prices rose because of that $1200 stimulus check they said they were going to distribute.
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“Any libertarian worth his salt would be aghast at the robbery by the Fed and the banking cartel.”
Lol. Try to find a single libertarian that is protesting the money printing right now.
The libertarians are just the weird autistic version of conservatives. Both support unlimited free money given to the bankers and their consorts, and unlimited free labor extracted from the debt slaves.
Gotta work hard, kid. Work extra, work unpaid, come in on weekends and holidays. No one is irreplaceable. Leisure isn’t free.
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“Trickle-down economics” is the modern way to say “crumbs from the master’s table.”
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Food banks are running out.
https://www.bitchute.com/video/boAb7VxFnGo/
I heard a rumor that seed sales of food crops have been banned in some places. Do they think the country will run out of seeds?
I solved the understocked and diseased supermarket chain issue, by visiting a small Italian run fruit and vegetable shop, that also sells goodies Italians like, like cured meats, imported pasta, bread, cans, yummy things in jars, etc. The abundance and quality is excellent, the front of it is open to the elements so the germs are blown out, and I spend less than the supermarket by 30%-40%. Check it out if you have one in your area.
And now for something completely different.
https://www.bitchute.com/video/TXmcbQYpRqeF/
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@JJ
If the food supply chains start collapsing things could get really, really interesting very, very quickly.
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Thorstein Veblen.
I’m off to read up on him and see about tracking down a copy of his book, “The Theory of The Leisure Class”…
Great thoughts above. Thanks folks!
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@Lyon
It’s been a while since I read it, and I can’t remember how the chapter “On The Subjugation of Women” goes, but regardless, it’s long seemed obvious to me that whether Veblen pointed it out or not, women are clearly “Veblen goods.”
The late blogger Neo-Nietzsche said:
1. The lower-class man wants to make a slave of his woman.
2. The middle-class man wants to be a slave to his woman.
3. The upper-class man provides a slave for his woman.
I’ve read feminists complain bitterly that wealthy tech-bros in Silicon Valley love to marry a beautiful woman with a high IQ, a PhD, and then “waste” her talents by knocking her up and leaving her at home to raise the children.
They said the status comes from the fact that she is brilliant, highly educated and capable of running a large corporation herself. But all that is “wasted” on being a wife and mother.
That’s a “Veblen good” – that’s conspicuous consumption and leisure, directly out of Theory of the Leisure Class.
Not only that, of course women-as-war-booty is the root of women’s BDSM sexual fantasies as well.
The neo-classicists are utterly, comically wrong. Human beings are not “rational consumers.” Far, far from it.
I need to reread that book and blog on it.
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I read that book when I was twelve.
It is the single most important book I ever encountered.
It changed my life forever.
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Started reading Theory of the L.C. in PDF, though I’m old school with a preference for a hard copy…
https://tinyurl.com/sls9y34
Agreed, man is not is not a rational consumer. I’m also 100 pages into The Collective Works of C.G. Jung, Volume 9 (The Archetypes and the Collective Unconscious). It’s not like I bought the tee shirt with Jung but there’s enough in there to negate any notion of humanity as blissful rational consumers.
The upper echelons of Tier One Women as a Veblen Good sounds brilliant to me and yet obvious once stated as such. Looking forward to doing a deeper dive on ol’ Thorstein.
Damn it, might have a peek at the blogger Neo-Nietzsche as well. His observation you sighted above seemed over the target as well. I spent a shameless amount of time in my early 20s pouring over everything Freddy Nietzsche wrote.
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