It’s frustrating when someone knows that he is missing a piece of a puzzle, and he refuses to accept the missing piece when you offer it to him.
Assume that the puzzle (above) represents a person’s understanding of economics. Over time, the person finds various pieces of the puzzle, and he puts them together correctly. Finally there is only one piece missing from the puzzle. That’s when the person gets stuck. He refuses to see that last piece, even when it is right in front of him, and even when you offer it to him.
This happens because people cannot recognize that last missing piece until they first let go of something else, whether it is a belief, a prejudice, a habit, or an emotion. People get stuck when they cling to errors.
For instance, Ellen Brown and her disciples falsely insist that all money is created as bank loans. If you try to awaken them from their trance (i.e. if you try to give them some missing pieces of their mental puzzles) they reject you.
These people got stuck when they learned two things…
- Banks create money out of thin air.
- The top executives of many banks are Jews.
Both of these propositions are true, but personal bigotry against Jews leads these people to a false conclusion…
- All money in our economy (all money) is lent to us by Jews.
Since these people will not let go of their bigotry, they will not accept the missing piece of their mental puzzle. Indeed, they think their bigotry is the last piece. Hence they falsely think that their puzzle (i.e. their understanding) is complete.
In reality it is not true all money in the economy is created as bank loans. Therefore it is not true that “All money in our economy is lent to us by Jews.” Hence these people are still missing a piece of the puzzle.
The reason I mention all this is that I have watched syndicated columnist Paul Craig Roberts improve his understanding of economics over the years. Roberts notes that standard economists distort or ignore many facts, but Roberts himself is missing a crucial piece in his mental puzzle. Here is that missing piece…
Paul Craig Roberts, 77, is missing this piece. Hence he still thinks the U.S. government runs on loans and on tax revenue. He served as an Assistant Secretary of the Treasury for Economic Policy in the Reagan administration, and still he does not understand that the U.S. government creates its spending money out of thin air. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service, and still he doesn’t “get it.”
Okay, so what? Who cares? I mention this because I repeatedly see how people learn for decades, and they mean well, but they refuse to see that they are missing a puzzle piece.
Paul Craig Roberts recently found some important pieces of his own mental puzzle by reading Michael’s Hudson’s latest book…
Mr. Hudson says nothing that I have not been saying for years, but for Paul Craig Roberts, the book is an eye-opener.
Hudson agrees with me that there are two economies: the financial economy and the real economy. The financial economy is the markets (i.e. “Wall Street”). The real economy is Main Street.
There was a time in the past when the two economies were united. Wall Street served Main Street (at least to some extent). Finance served industry.
Today the two economies are separate, and Wall Street is a deadly parasite on Main Street. Eventually the parasite will kill the host.
Economists are paid to camouflage this nightmare by pretending that the two economies are still one and the same. Thus, when the financial economy is booming, the pundits falsely claim that the real economy is also booming. They say it is in a “recovery.”
Put more simply, by falsely claiming that Wall Street is Main Street, the pundits can falsely claim that Main Street is booming, when in fact Main Street is dying. That’s the situation we have today.
Also, as I have often noted, the purpose of austerity is not only to widen the Gap between the rich and the rest (and widen the Gap between Wall Street and Main Street) but also to reduce the masses to debt slaves. For example, federal politicians could pay for everyone’s college education by using money created out of thin air. But politicians refuse to do this, since they have been bribed by the bankers, who use loan money (created out of thin air) to reduce millions of college students to debt slaves. This is an example of austerity and the Big Lie in action.
You already knew all this, but for Paul Craig Roberts it’s an astounding revelation. And Roberts was an official in the U.S. Treasury!
Readers often ask me how they can learn economics. I tell them to spend many hours with Hudson’s book. Study it closely, section by section. When you understand the book, you will understand economics better than any Nobel prize-winning economist. Many current events cannot be understood independently of Hudson’s explanation of the financialized Western economy. Michael Hudson is the world’s best economist.
Now if only we could get Paul Craig Roberts to understand that the U.S. government creates its spending money out of thin air.
As for Michael Hudson, his book is correct, but incomplete. Debt and financialization are only part of the picture. There is also gratuitous austerity, which is why we have debt slavery in the first place.