Or Modern Monetary Theory (MMT).
Take your pick but basically it amounts to central banks creating vast amounts of credit by various means and then blowing that into the economy to keep the private sector moving along.
At which point it ends up in the hands of very rich people who own assets.
To that end I loved the myriad idiocies about such things in this ranting post over at The Daily Blog by one Finn Flynn, The Road to Serfdom: ACT’s map to backwards. Mr Flynn is one of those Far Lefters who now run around getting outraged if anybody calls him a communist, since in the wake of the collapse of so many communist socieities, and the soul sucking uselessness of the ones still going, such people are regarded as fringe figures generating more mirth than anger nowadays and worthy only of mockery.
But if you read that piece you realise that…. he’s a just another dirty commie. 😂😂
I wrote a comment in response to just three of his idiocies (“the hands-off response by Herbert Hoover” is a classic) but naturally they didn’t get published, so I’ll stick with just one here because it’s relevant to the topic of this post. Mr Flynn writes:
But ACT insists that the Reserve Bank should focus solely on using the OCR to control inflation. Why? Because inflation eats away at investment returns for the wealthy. If inflation reduces the value of a dollar over time, then lenders – wealthy investors and financial institutions – reap less return on money they have already lent. They get the same nominal dollars back, but their spending power – their value – is less. So ACT must stamp out any instruments that undermine the interests of the wealthy.
The huge surge in wealth that happened to Musk, Zuckerberg and Bezos, in 2020-2021, is a direct result of QE/MMT. They don’t hate inflation but love it, because inflation loves assets. You don’t need to be a billionaire either; ask any Auckland homeowner about rising house prices in 2020 and 2021 as our government did the same thing in the NZ economy.
I’m also pretty sure that Flynn – despite commenting loftily on Hayek’s Road To Serfdom – has never actually read it, given the howlers he makes about it. For a start, Hayek actually saw a place for Western economies to have social welfare systems; in fact he thought them vital, so he’s no purist on Laissez-faire. The overwhelming thrust of his analysis in that book was that centralised command-and-control economies (like the USSR) would ultimately fail because they could not replicate the enormous amount of economic data that exists in marketplaces. Incidentally the same limit on information applies to the forecast dystopias of Artificial Intelligence’s running the world.
Flynn also references “Historian” Howard Zinn’s A People’s History, because of course he would. Never mind that the “Historian” himself said it was less history than a polemic, and it’s been regularly torn apart as such by even Leftist historians.
Having said that the following moving graph – obtained via the NZ blog, Utopia – does a good job of tracking the wealth comparisons of four of the richest men on Earth:
- Elon Musk
- Jeff Bezos
- Bill Gates
- Mark Zuckerberg
The tracking runs from 2007 to late 2021. It should be noted that in 2022 Zuckerberg’s fortune has collapsed by about $100 billion.
Two things about this chart strike me as curious.
First, the surge in Bezo’s fortunes in 2016-2017, when he suddenly moved past Bill Gates to become the richest man in the world (publicly anyway – there are those like Putin), even though Microsoft and Amazon were constantly switching places in total wealth; it’s not like Amazon, where Bezos has his wealth stacked, suddenly surged the same way.
Second, the same thing happens to Musk starting in early 2020 as he goes past Bezos in about a year. I’m well aware of the fact that a combination of people being forced to sit at home during Chinese Lung Snot lockdowns resulted in massive increases in the use of Facebook for social connection and ordering stuff from Amazon to be delivered at home.
But what’s the reason for Musk’s wealth explosion? I can only assume that it’s due to the massive amount of shares he has in Tesla and the fact that those shares took off finally, even if the company’s total value is nowhere near that of Amazon, Apple and so forth. But given that it’s tough for a company that actually builds things to expand as fast as an data-based business model, I can only assume that 2020 was the moment that investors started betting on the future by diving into Tesla as the leading EV manufacturer.
Still, it’s a cool video to watch.
No Minister 
The one thing you have in common with Chris Trotter is that you are both stuck on world views built on narratives of the past times.
The modern West’s economy is a rentier economy which produces little of value but extracts tribute from those who do and maintains its power using the bloated military power of the USA in a manner no different from a Mafia Don .
But those days are coming to end
And by the way where is Putin’s wealth, you make your snide remark but the truth is if Vladimir Putin had any wealth stashed in any Western financial institution it would have been stolen already just as money held by other Russians in Western financil institutions has been stolen in the name of sanctions™”. This by the way includes assets of the Russian Orthodox Church because Western Governments are not above stealing from God.
It is going to be a cold winter in Europe this year…
I should have known not to put in that piece of bait, though I never intended it to be such. But there’s plenty of evidence that your boy has piled up some serious wealth stashed around the world.
We’ve certainly slid in the direction over the last two decades with outsourcing purely on the basis of cost. But that’s starting to shift now as it becomes obvious that economic engagement with China has simply turned them into a monster.
The one thing the West has on its side is that as useless as our leadership is now we’ve had similar shite in the past and when push comes to shove we’ve replaced the useless bastards. Sure, there’s a period where we simply move from a Bush to an Obama to Romney-type, but when institutions start falling apart we’ve always found people to fix up the mess.
By contrast the people you’re placing your faith have total political power as their only goal. I wouldn’t get too cocky about your Russia-China alliance since it looks like ole Xi is going to go down the Mao route and to hell with the semi-capitalist economy that’s pulled them out of the crap in the last forty years. Like Putin it’s all going to be about total internal political power and control to the exclusion of everything else.
That never ends well. What’s going to happen when they die in a system they’ve made dependent on the Strong Man in the centre? (and neither of them are spring chickens). By contrast if Biden or Ardern dropped dead tomorrow we’d simply move on.
My God Andrei sane yesterday and insane today.
While me may have crap leaders, and we do, we can and will vote them out eventually.
The poor put upon Russian people are stuck with their idiot. Xi’s taking China into a more totalitarian direction will not end well. However the Chinese people are stuck with him with no way out.
That’s the difference with your side and the West and the west will prevail.
Well, I learned something today. I was about to post a “that’s not a word :(” reply about “rentier” and then I looked it up and found out that a) it is a word and that b) it comes from the French “rente”, i.e. dividend. I do know that rent-seeking behaviour i.e. amassing assets often with government assistance and then renting them out to the less fortunate is at the lower end of the capitalist spectrum and is a non-productive and often exploitative (e.g. rental property slumlords) way to make money but that is the way that the NZ economy is largely structured at the moment due to a lack of innovation and research and development investment e.g. where is the NZ equivalent of the Australian CSIRO? The mouldering corpse of the old DSIR/CSR known as Callaghan Innovation? Don’t make me laugh 😦
Funny he never mentioned Russia……. ummmm.
The guy is a waste of time. Is this where you get your ideas.
Russia !No gas , no oil to sell, no true manufacturing, empty supermarket selves. I wonder if deflation leads to war.??
It leads to revolution..stay tuned
Andrei the video you posted explains a lot about you and your delusions of Russian grandeur.
No doubt Putin , Andre, has his wealth stashed away in Switzerland, or in assets purchased on his behalf by his acolytes. Dont be so naive !
That explains why the ordinary Russian has seen their wealth, their potential wealth, and income eroded by the thieves who run Russia.
Nothing new there for the last 600 years of Russian history.
Those thieves were given their money through an allocation process of state assets in Russia provided they were nice to Putin.
Bezos and co actually earnt theirs by having a clever idea. Thats capitalism and democracy in action.
As for being a cold winter in Europe, I doubt it. Putin has miscalculated again.
Sure its going to be a more expensive winter in Europe but Russia’s customers are gone forever.
I suspect the next 5 years in the shithole called Russia, for ordinary Russians, will in fact be a unheated, miserable, hungry shithole of a country.
Ah well, as you would know Andre their is always the Russian standby, decent into alcoholism
So…. although The West may be spiraling down to DOOOOOMMMMMM…..does anybody wish to talk about thing while we surf on the edge of cortex – such as discussing the actual point of the post 😂😂😂😂😂😂 – which is the massive accumulation of wealth in the last decade and especially the last two years by these few men?
Capitalism? Stupid amounts of credit creation by central banks? A combination of the two?
For that matter has anybody clicked on the link TDB post for good fun and does anybody have anything to say about that points the Finn Flynn made re the ACT party?
I don’t know what you expect from comments Tom
But you are lamenting the rise of the Western Multinational technocrats who are turning our erstwhile democracies into an supra national oligarchy while simultaneously deriding the one man who is impeding their growth in power and wealth
Politicians who stand for the interests of their own people over those of the technocratic elite are often derided as “populists” as if this were a bad thing.
Viktor Orbán is one who comes in for scorn in this regard as are
Recep Tayyip Erdoğan and Aleksandar Vučić, perhaps, but as his nation is now surrounded by the forces of the Godless North Atlantic Terrorist Organization the enforcement arm of the technocratic elites that allows them to slurp at the trough. he walks a tightrope.
You can bitch about inflation all you like but how many New Zealanders today are actually employed in productive enterprises and how many are just drones employed in essentially useless activities like working at the Ministry of Women’s affairs churning out nothing but bullshit
And how much productive agricultural land has been diverted into forest top serve the economic soak pit that is the ETS that adds a cost to everything without adding a scintilla of value and has actually driven useful economic activities such as cement manufacture from our shores to other lands not ruled by tools of the technocratic aristocracy like Jacinda Ardern, Christopher (dreary, grey, little man) Luxon etc.
Riddle me that mate…
“not ruled by tools of the technocratic aristocracy like Jacinda Ardern, Christopher (dreary, grey, little man) Luxon etc.”
You are very right about them Andrei, but better fools like them than a homicidal maniac madman like Putin.
Andrei please do us a favour and go and live in Putin’s shithole country. I’m sure you would be happier and so would we. Maybe you could still post your nonsense from there.
So what about the massive accumulation of wealth? Am I supposed to be jealous or so envious I cant sleep at night?
Should I feel the same way about the Rockerfellers a generation or two ago, whose wealth in relative terms may have been greater as the hoi de poli were relatively poorer.
But all boats rise in a capitalist world is self evident.
Should i look back at Louis Quatorze with those feelings.
Sure they are wealthy, thats the system. Thats the .05% of the bell curve. Some of them are simply brilliant in one area but the rest of their personalities hides the fact that they are twats.
Musk was even good enough to generate billions of subsidies from the US tax payer with his crazy ideas on battery cars… good on him.
I’m glad the system throws them up as they are catalyst for change and wealth creation. A point sadly missed by Flynn.
Reading Flynn is like reading Marx, which I had to do for economics, or reading Andre on Russia. Both are tone deaf, and both are boring to read.
Biased polemics at the end of the political scale with no inflection and with misuse of facts.
I didnt get down to the Act party but is clear he has a chip on the shoulder. I suspect he attended Morrinsville High School