Economics in nine panels

Wally's Hobby Is Economic Babble Talk - Dilbert by Scott Adams

Wally Won't Oversupply Wisdom - Dilbert by Scott Adams

Ceo Understands Wally - Dilbert by Scott Adams

The funniest jokes are always the ones that poke sharp sticks into the vulnerable points of real things, and this is no exception.

If you've ever had to listen to an economist from a central bank speaking on television- and here I'm referring to "real" economists with "real" degrees from "real" universities like Harvard and Yale and Princeton and Cambridge and Oxford (and LSE)- you'll know that they all end up sounding almost exactly like Wally up there.

Here's a little secret that they never teach you in undergraduate economics courses:
No senior central bank economist in his right mind would EVER want to make sense.
The reason for this is very simple.

Central banks thrive on anonymity and secrecy. They do like to "keep the markets guessing"- I recall that Alan Greenspan was a big proponent of this, the idea being that markets will trip over themselves to figure out what interest rates will be and thereby become more competitive, more transparent, and more willing to take risks. His eventual successor, Ben Bernanke, was by contrast a big fan of "inflation targeting", which would lead to predictable and straightforward inflation and thereby lead to "more optimal allocations of resources", as economists like to say.

All of this, though, masks the real reason why central bankers hate being understood by the rest of us.

By the very nature of their jobs, based on every last tenet of their educations, they are literally central planners. It is their job to plan the course of the economy. They are, in the most literal possible sense of the word, Marxists.

Don't believe me? Look up the Ten Planks of the Communist Manifesto and take a look at Plank 5. And then compare it with the way that the US Federal Reserve, the Bank of England, or the European Central Bank actually go about their business. If they are not Marxist organisations, then our dictionaries need a thorough rewriting.

Like all central planners, though, the Federal Reserve, and all central banks worldwide, simply cannot manage an economy properly. It is the absolute height of lunacy to think that mortal men can possibly comprehend all of the billions upon billions of simple economic interactions that millions of people conduct on a daily basis without even thinking about it. No amount of computing power, no amount of statistical analysis, can ever model the true complexities of human behaviour in all of its glorious randomness. Central planners everywhere keep forgetting this, and keep failing to understand the point of price signals, which is why they end up creating one spectacular disaster after another in the form of hyperinflated asset bubbles followed by gigantic crashes in asset values.

And if the rest of us ever understood what they have done to our money, well, the pitchforks would be sharpened, the tar buckets would be readied, and the pillows would be ransacked to yield up their feathers to a worthy cause.

Indeed, when you compare what the Fed and central banks around the world have done to the value of a unit of national currency in any given nation that has adopted fiat money in the last hundred years, even defenestration becomes a perfectly reasonable penalty for such wanton destruction of monetary value.

InflationDollarDecline1913-2013
Ouuuuuuuuch, dude
Simply put, if more people really understood what it is that central banks actually do, central bankers would be an endangered species.

Now, in spite of the weight of the evidence before us, some folks, even highly intelligent ones, have a tough time understanding this.

Last Saturday night was really quite pleasant for a number of reasons, all of which had to do with the company of a certain rather attractive woman of my acquaintance who, among her many other manifest charms, happens to have a good-sized brain in her skull. (She's female, which means that she's every bit as susceptible to a good bit of hamstering as any other woman, but she's also a very smart female.) We started out with drinks at a lounge nearby, and during the conversation we ended up discussing a lecture she'd attended recently where a bigwig from the Bank of England was giving a speech.

She was rather annoyed by the fact that, in the entire speech, this VVIP didn't say one damned thing of any consequence. And she was quite perplexed when I started laughing and pointed out that central bankers are paid to be as opaque and as boring as possible. She figured that, if you're going to be paid good money to come to a prestigious college within the University of London system to give a lecture, you might as well give people their money's worth.

She was forced to reluctantly agree when I pointed out that he probably gave the lecture in order to get a good free breakfast.

And, from a central banker's point of view, if you've been paid decent money to spend part of your morning confusing the hell out of the voting public while not saying very much of anything, and you get a free breakfast out of it, well, where's the bad?

In all seriousness, a fiat money system is based on nothing more than thin air and make-believe. And like all such systems, every fiat money system will eventually collapse. It's merely a matter of time. The problem is that this horrible resolution takes a very long time to come about. And during that time, there is literally no limit to the misery that a runaway central bank can inflict upon a populace that is too stupid, too uneducated, too passive, or too feeble to do anything about it.

This is why we must audit the Federal Reserve. This is why we must restore a hard-money standard- if not with physical gold, then at least with a constant-purchase index made up of a basket of other currencies. This is why the next great crash is not only coming, but will be far worse and more painful than the last one was.

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