Politicians Have No Skill or Honor to Manage the Economy

Asking the state to manage the economy through central Banking is a case study in what happens when the fox guards the henhouse.

Broken piggy bank

Why is the euro destined to fail, and why will the dollar and United States financial system collapse, if we do not change course?

Once again, Charles Hugh Smith provides the answers in this superb piece. When you put major economic power in the hands of government, rather than a free market, you inevitably turn financial decisions into political decisions and that means the “in” people will always fraudulently use the system for their own benefit.

This is the fundamental flaw in state fiscal discipline: it is always a political construct and thus contingent on what benefits powerful elites and constituencies.


The idea that the political leadership of a state or super-state could impose a discipline equivalent to that imposed by a market was always a fantasy. As a result, the idea that political discipline could impose painful and difficult reforms on politically powerful elites and vested interests was also a fantasy.


There is no substitute for the discipline of a market that cannot be manipulated by political elites…

The Federal government needs to end all financial meddling not initially authorized in the Constitution. The Federal Reserve has been a tool of the financial and political elite for a hundred years to increase their power and wealth—at the expense of freedom and the expense of the vast majority of citizens.

The elite ‘buy off’ people at the bottom of the economic ladder with “social welfare,” giving them just enough to get by, but not enough to threaten the elite’s hold on power and ill-gotten money. In the process, they cut off the rungs of the ladder of wealth for the vast majority of citizens.

Those who get government checks are convenient tools of the one percent (actually the 0.1 percent). They accept a pittance to buy their silence and complicity, at the cost of hope and freedom.

Europe is about to have its elites tested as they have not been for a couple of generations. My great hope is that the coming crisis will topple many regimes, and provide hope that we can do the same in the United States. Unfortunately, the people of Europe—and America—have virtually no concept of what it means to live in freedom and prosperity, so what comes from the collapse may very well be worse than the current disease.

The reason I still hope for it, is that I find the risks of freedom preferable to surviving on whatever crumbs the elite feel obliged to throw on the prison floor of their global domination games.