ODonnell On Politics
columnist: Jim ODonnell

Topic: Monetary Policy
THE END OF CONSUMERISM AND CREDIT

---

No Santa Claus Is Not Coming This Year He Has Been Arrested For Being A Terrorist By Homeland Security

---

by Jim ODonnell
(Libertarian)
Monday, December 3, 2007

I would like to explode once and for all the fallacy of the "economic" concept of consumerism. Because economics can be dense, dry and sometimes boring many just accept certain ideas as the gospel truth. This is true even when after a few minutes of thought they vaporize into nothingness and leave you laughing your hind-end off that anyone could have ever believed such crap in the first place.

One such concept is generally know as "Consumerism." It holds that the consumer is the driving force of the economy, you know the consumer accounts for about 70% of all economic activity. Will consumer spending hold up and keep the economy from going into a recession, etc., etc., etc. Implied but usually is never stated is that if the government can only get the consumer to buy-buy-buy that the economy will grow forever. This concept could also be renamed the "Happy Days Are Here Again" theory of economics.

Let's take a short look that this theory. I will use a device which I developed called the "Desert Island Model." This is similar to a device used by Ludwig von Mises which he called "The Evenly Rotating Economy" [see Human Action]. What these devices attempt to do is to eliminate as many extraneous matters as possible in order to examine a particular problem. This is necessary because economics is not a hard science and it involves millions of possible influences and participants.

Here on the desert island of ODonnell live 1 million people who do not work but just lay around under the palm trees all day and wish that they were rich, and also that they had something to eat once in a while. Professor of Economics Bubble Head says that the problem is that there is no consuming happening, and if we just get all these folks buying stuff that everything will be just fine. Ok, enter the government who drops tons of dollar bills all over the place to assist this consuming to begin.

Well everyone on the island just loves these cute pieces of paper but since the are no stores, goods, food or anything else there is no consumer revolution. The natives just use the paper to make nice decorations and also to burn at night to keep warm. Gee, something must be wrong with this economic theory. Yes there is. What consumerism presupposes but dares never mention is that to consume first you must produce. Even any viewer of Survivor knows this to be true.

Damit we can't talk about production as that messes up our theory. Our theory says that production follows after the demand is created by consumers. Well after just a few words and some thought the entire theory of Consumerism just pops like a balloon pricked by a pin.

Then how can this false theory drive our government and all others around the world, each central bank and the economics departments on most universities in the world. I don't know but it does. Well yes I do know, as it permits others [which usually means the speaker] to control everything on the planet according to his own particular dreams. Lots of power into the hands of idiots.

With this lead-in I present a fine article by Peter Schiff of Euro Pacific Capital called "The End of Consumer Credit as we know it." He shows with just a few examples why this will be so. He also has been writing about this Subprime mess for years and has been right on the mark. He is now even getting coverage in the major media on a regular basis as now they can't ignore him any longer.

At the bottom of the article are links to his web site and also an email address if you care to communicate with him. After I scanned his web site I was mildly surprised by his recommended reading list which includes Ayn Rand, von Mises, and a host of other Libertarian type authors. Is he a Libertarian? My Guess is yes. Here is the link to his article:

Dec 3, 2007 The End of Consumer Credit as we know it Peter Schiff 321gold . . . Inc

Did you like this article?
If you did, Thumb It!
2 thumbs so far

2007 Jim ODonnell, all rights reserved.
Published: Monday, December 3, 2007
Last modified: Monday, December 3, 2007

The views expressed in this article are those of Jim ODonnell only and do not represent the views of Nolan Chart, LLC or its affiliates. Jim ODonnell is solely responsible for the contents of this article and is not an employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.

Report violation by Jim ODonnell of Nolan Chart LLC's terms of use policy.