Need and Demand: As we saw in The Paranoid Quiz, the austerity (removal of government interference in the marketplace – freeplenomics) in response to the 1920 Depression restored freedom which created consumer confidence and produced demand. This demand produced an economic recovery unlike any other in history from one of the worst depressions in history. The response of deliberate government manipulation of the marketplace (creeplenomics) to the Great Depression did nothing to assuage the desperation of need in consumers, so no new demand was created and the economy stagnated. Consumers had no confidence that what little wealth they possessed (if they had any at all) could be replaced in an economy hamstrung by government control.
Freeplenomics and Creeplenomics: Once more – freeplenomics equals more freedom in the marketplace and creeplenomics equals less freedom in the marketplace. The big-government objectives of creeple policy essentially boil down to what is known as collectivism. Need is also the reason that spending on wars does not stimulate the consumer marketplace. Military expense is need, not demand, and does not produce confidence in the marketplace to free up excess consumer wealth. There may be industry-specific demand generated within the war industries, but it is conducive to continued government spending which is also counter-productive because of the crowding out effect which reduces consumer demand because of the focus of the economy on producing materials and manpower for the war effort.
Premise: Despite the example of the Roaring Twenties, creeple economists stamp their feet and insist that austere economic measures do not lead to prosperity. History again tells us otherwise. Germany and Japan after defeat in WWII were forced into the austere economic policies of freedom. They have since become two of the great economic powerhouses in the world. America implemented austerity in the form of tax cuts, reduced government spending, a reduction in the size of government, and a removal of government trade tariffs after WWII. These measures finally ended the malaise of the Great Depression that lasted 17 years. The Soviet Union, despite victory in WWII, refused to reform its command-style economy of enslaving collectivism (creeplenomics is also a type of command-style governance – collectivism) and ended up collapsing in 1991.
Question: Which economic direction would you rather America follow today? That of the U.S.A. after WWII, or the Soviet Union? (Hint – President Obama has chosen to follow the direction of the latter with more government control and manipulation of the marketplace.)
Conundrums: Germany was split into East and West at the end of WWII. West Germany was governed on the basis of freedom. East Germany came under the command-style governance of the Soviet Union. West Germany went on to become an economic power of Europe. An impoverished East Germany begged to be welcomed back into a union with W.G. when the Soviet Union collapsed.
Korea split in the 1950s after a terrible civil war. The north went with a command-style governance of collectivism. The south adopted a freedom-based governance. South Korea is now one of the most prosperous countries in the world. North Korea is among the poorest.
The free-er that China’s economy has become over the last couple of decades, the more prosperous it has also become. The more restricted by overbearing and manipulating government policy that the European economy has become, the more prolonged its malaise has become – ditto America.
[Creeple use your own paranoia against you so that you will accept and even demand more enslaving command-style government (creeplenomics). Please ignore your anxiety and instead be relieved that there is indeed a proven way to turn the American economy around from this horrible Obama Malaise – the freedom policies of freeplenomics.]
Explanation: Creeple will respond that recent austere measures in a few European countries haven’t worked. Really? All I see is economic collapse, not the austerity policies of reduced taxes, regulations, government spending and size. And Greece and Spain enacting a few meager austerity measures would have about as much effect on the whole European economy as would Maryland and Rhode Island in regard to the U.S. economy. To be effective on a macro level austerity will have to be continent-wide in today’s united Europe, and country-wide in the U.S.A.
Quite simply, more freedom is the ticket to prosperity, not less freedom with a command-style governance of creeplenomics which includes higher taxes, increased government spending, a larger government, more regulation, bailouts, and penalizing some industries while subsidizing others. President Obama has chosen to follow the latter, with an unsurprising result (a shadow-replay of the Great Depression), an Obama Malaise without a foreseeable end.
Conclusion: Again, history amply illustrates that the freedom of austerity works (freeplenomics), and command-style government (creeplenomics) does not.
Need and Demand: Countries permanently run by a command-style government never become truly prosperous, although the elites may become very wealthy while the masses remain poor. Countries like the U.S.A. who alternate between austere policy and command-style policy tend to oscillate back and forth between prosperity and malaise. Today under President Obama’s command-style government need is dominant and demand is stifled, and America remains stuck in the Obama Malaise until the austere measures of freedom can again be implemented to reduce need and produce demand.