I don’t know whether now, when some recommend a rewriting of economy books, it makes any sense to discuss rational expectations. Because expectations are not necessarily that. Expectations can bear an emotional weight, when politics enter and denature by regulations the natural behavior.
Of course, this is an opportunity to advance from the theory of rational expectations to information asymmetry, which occurs when a low education level allows propaganda to mislead, to secure a comparative advantage and to preserve a form of power.
Yea, but you know what the manipulated ones get in exchange, so they do not sense the cultivation of asymmetry? Democracy. There is a reinforcement of their feeling about those equal from a given standpoint being equal from all, without considering that the postulate does not operate without education and without the common sense provided by upbringing.
Having said this, we can move forward to the odd connection between progressive taxation and negative interest rates. That is, if anyone has a job and gets a second one, they are penalized for being industrious, by taxation on the next tier. Then, if they are able to save and thus finance the society’s deficits, they are “punished” again by negative interest rates. Thus, the interests are no longer a barrier against wasting the resources - they’re an incentive to do that.
After the negative natural change of the population, negative economic growth and negative interest rates, surely the new economy textbooks will establish the notion of negative dividends, when the shareholders will be deemed collectors, not investors. But I won’t digress, because I want to point out that those who made a life out of trafficking what they pick from the pockets of productive people are the politicians.
They turned the free will charity into an obligation, by law. Until the protection - the socialization of losses - has become more important than the capital and the work.
Probably that’s why one of Murphy’s Laws states that politics is the art of getting votes from the poor and campaign contributions from the rich, promising each side protection against the other. Sadly, politics looks hardly like an art, if we trust Mark Twain: Lawmakers are just felons who legislate when they are not in jail for some petty crime.
But let’s give up the satyric support and see how right Gustave Le Bon was when saying that while scientific progress has led elites with superior minds at the helm of the modern life mechanism, the progress of political ideas granted the masses with inferior minds the right to govern and to indulge in the most dangerous fantasies, through their representatives.
Had the crowd elected their representatives among the civilization-building elites, the present problem would not exist, but such an election is merely exceptional, because the crowd and the elites are more and more obviously antagonistic. Elites were never so necessary, yet never so unbearable. Only the poor intellectual elite is somehow tolerated. The opulent industrial elite is not accepted, and the so-called social laws, dictated by the representatives of the masses, are only meant to despoil it.
How is it possible to bring an elite, without which a country would be nothing, to live next to a huge mass that aims to crush it? History has demonstrated that masses, extremely conservative despite their revolutionary instinct, have always reinstated what they demolished, thinks Le Bon.
So certainly the most destructive popular victory will not alter for long the evolution of a nation. Unfortunately, what took a day to destroy often takes centuries to restore.
We’d better avoid that. A remedy could be limiting the popular governing. Elites are those who have to adapt, to dam and channel the fantasies of the many, like an engineer who dams and channels the force of a torrent.
Adapting the elite to the government of the many wouldn’t be so difficult if politicians, the illusion mongers, had not inoculated in the souls of masses only hatred and errors, the only crutches of antagonism. It will disappear when the masses, aware of their real interests, will consider that the extinction or depletion of elites would quickly result in poverty, then in the failure of the whole society.
I will summarize by underlining that we are working against nature, and the best proof of it is the adverse selection and moral hazard practiced through the QE. This reveals the fact that we are witnessing a dilution of instincts, even if the phenomenon is interpreted economically, in search of trust.
Perhaps the etatist “logic” managed to brainwash us, but considering things naturally, taxation is merely legalized robbery, just like conscription is legal kidnapping. And the quantitative easing (QE) of the monetary base is legalized counterfeiting.
In what context are all these necessary? When they compensate the loss of instincts. And this way of confusing things to keep the politics honorble isn’t even new. Politicians have not changed over the past hundred years. This is illustrated by the verse of Constantin Tanase, the immortal comedian:
We’re living through heavy crises /
Currency is down again /
Growing taxes and excises /
Where in this is our gain?
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