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A note from The Dollar Vigilante - Outside View by Jeff Berwick

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A note from The Dollar Vigilante
Sep 2, 2011

I stopped reading fiction books or watching fiction movies a long time ago. I even stopped reading mock-news comedy sites like theonion.com. Why? Because none of them can compare to the insanity of real life.

Take this one as an example. The prince of peace, Barack Obama, nominated a new man to head the "White House Council of Economic Advisers" on Monday.

I have to admit, for a split second, I almost leapt off my balcony to the beach 29 floors below! I thought it said that Krugman -- Paul Krugman -- had been nominated to be Barack Obama's top financial adviser!

Considering that Paul Krugman has been lobbying for war to get the economy working, and his latest scheme that he drew up in his lab was to fake an alien attack (see "Krugman's New Extraterrestrial Economic Plan for America") so we could put everyone back to work building lightsabers and plasma rays. Then, after everyone had spent a few years focusing all their efforts on that, he would announce that it was all just a grand ruse to "get the economy going." In his mind, we'd all fawn over him for coming up with such a great way to get us all back to work! Sure, we spent two years destroying incalculable human and natural resources. But hey, that's better than not having anything to do, right?

Thankfully, I had misread, and it wasn't Paul Krugman:

It was Alan Krueger... a man who has been working in the White House for two years and who has his doctorate in Keynesian economics from Harvard University.

I knew, just from reading that he had his Ph.D. from Harvard, that he would be a moron. That's just a given with those "credentials."

I strapped myself in (to ensure I wouldn't throw myself off my balcony) and began reading his list of "accomplishments."

It starts by saying that he wrote a book whose mission was to convince people that raising the minimum wage does not increase unemployment.

Thank goodness I was strapped in tight! Are you kidding, Krueger? I can refute your entire book in one sentence, and there is no rational thing you can say in response. Ready?

If that is true, then raise the minimum wage to $1,000/hour, and tell me how that will not result in unemployment rising to 99.5% or higher. At that rate, only people currently making more than $1,000/hour would be employable.

I mean, really. This is Obama's new senior adviser?? This will probably shock him then, but removing the minimum wage completely would result in full employment. Heck, I'd even hire Alan Krueger to wash my car all day long for $0.15/hour. That may be something he is actually good at, too.

But maybe he has accomplished something in his career... let's read on.

The next big thing he is known for is being "instrumental in the 'cash for clunkers' program."

Yes, what a stroke of genius that was! Let's offer heavily indebted Americans incentives to trade in their perfectly good, working used cars and to go further into debt to buy new cars. Then, let's take the used cars and destroy them. Yes, good, working cars... throw them on a scrap heap. Net result? Americans are more indebted, and hundreds of thousands of good cars are destroyed (causing the price of used cars to rise 20%, BTW).

Sheer genius, Alan!

What's your next masterpiece? Cash for Houses? Anyone with an older house that they have paid off can call the government and have them come and burn it to the ground, and then offer them incentives to buy a new, much more expensive house that they can't afford! This Keynesian economics stuff is easy! I'm surprised anyone even has to go to Harvard for this. Just pick something... anything. Destroy it, and have the government write you a check for doing so!

The USSR failed 20 years ago this month. It failed because it made the incorrect assumption that the economy could be managed from the top down by a bunch of propellerheads with mathematical equations.

Economists and thinkers like Ludwig von Mises and Murray Rothbard, who had stated that socialism and economic central planning would not work, were vindicated at that time.

Mises, Rothbard and the Austrian School of economics was right. They continue to be right and will always continue to be right. However, politicians and the public in general don't like the message. The message is that there is no free lunch. Now the lure of trying to centrally manage an economy has made a great comeback. This time, in the USA.

This nomination of Alan "Freddy" Krueger only ensures that the Nightmare on Pennsylvania Avenue will continue on to the bitter end.

Our holdings in real assets, gold, silver, precious metals stocks and internationalizing our assets, especially outside the U.S., continues to be the most rational of choices.

Regards,

Jeff Berwick
The Dollar Vigilante

This article has been sourced from Whiskey and Gunpowder.

Jeff Berwick, a self-described financial freedom fighter, is the founder of Canada's largest financial website, Stockhouse.com. He now writes the libertarian, Austrian-economics based newsletter, The Dollar Vigilante and is a regular speaker at many of the world's most important investment, resource and freedom-focused conferences where he is known as the most dangerous man in finance.

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