A Tale of Two Shutdowns (Part I)

And the trouble with getting what you pay for...

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“Be thankful we’re not getting all the government we’re paying for.”

~ Will Rogers (1879-1935)

Joel Bowman with today’s Note From the End of the World: Buenos Aires, Argentina...

We awoke, dear reader, as if into a dream...

An “Auction” sign on the Congress lawn… A “Foreclosed” notice on the White House gate… and a yard sale out front of the Federal Reserve, where people sifted through shoeboxes of fiat notes, none of them “worth a Continental.”

From one End of the Americas to the other, the gears of government are grinding to a halt. Today, we heave a bag of cement into the mix, just for good measure.

As you’ve no doubt heard, from hyperventilating neckbeards on the mainstream news, government workers are lately going without, as federal programs go unfunded from Washington DC to Buenos Aires.

Of course, the “Tale of Two Shutdowns” reveals entirely different motivating forces, and will thus likely yield entirely different results. As such, some see their situation as “the best of times,” while others contend it is “the worst of times.”

This week, some unpopular thoughts on them both...

Flying Blind

First, the sitcho up north, as relayed by the state’s apple-polishing newswire of choice...

WASHINGTON, Nov 4 (Reuters) - The U.S. government shutdown on Tuesday entered its 35th day, matching a record set during President Donald Trump’s first term for the longest in history, as Republicans and Democrats in Congress continue to blame each other for the standoff.

The toll increases by the day. Food assistance for the poor was halted for the first time, federal workers from airports to law enforcement and the military are going unpaid and the economy is flying blind with limited government reporting.

And on, and on, blah-blah...

Reading the press’s soft, pseudo-lamentations, we are led to believe that, without the tireless work of selfless government employees, the crème de la crème of our otherwise fallen species, mankind would be left wandering naked in the dark, without so much as a club with which to throttle his covetous neighbor. Here’s now Big Government’s arch-apologist, Thomas Hobbes, saw the state of nature (from his own monstrous doorstop, Leviathan)...

“In such condition there is no place for industry; because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving, and removing such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.”

False Dilemmas

So that’s it, eh? Government... or violent death. The State... or no building, no moving, no removing, no industry. Centralized authority... or no arts, no letters and no knowledge at all.

As a man who never met a horse he did not wish to place behind a cart, it might be said of Hobbes that he was a kind of intellectual precursor to the AOC, Mamdani, Bernie Sanders faction...except that the postcursors lack the intellectual prerequisite.

To be sure, we do not begrudge the poor their daily bread... which is precisely why we don’t want them beholden to the state for piddling handouts in the first place!

If ever there was a “utilitarian” argument for favoring the profit incentive, for inducing those “greedy capitalists” to provide the very best goods and services at the most competitive prices, it would surely be to do so to the benefit of those least able to afford them.

And yet...

Right now, we live in a world that provides Gold, Diamond and Emerald Status for our highest fliers... but which subjects the poorest among us to the Michelin star equivalent of government-brand imitation gruel.

Rather than maintaining the proverbial “safety net” for those struggling to make ends meet, public disservices crowd out much needed private competition where it’s needed most, ensuring ersatz healthcare and subpar miseducation for generations of welfare dependents, who are in turn conditioned to expect no better, and to never bite the hand that force feeds them.

As for the economy “flying blind” without the government’s deft and skillful guidance, have you ever read such poppycock in all your days? Government “reporting” is not so much a reliable navigation system as it is a blizzard wrapped in a blindfold... dipped in chloroform.

Continued Reuters...

No federal funding means limited government data for the U.S. Federal Reserve to pinpoint jobs and economic data as the central bank steers policy.

The American Federation of Government Employees, the largest union of federal workers, is pushing for a stopgap funding measure that the Democrats have voted against.

Featherless Bipeds

The US Federal Reserve has been “pinpointing jobs”, “gathering economic data” and “steering policy” for over a century (since 1913). According to Federal Reserve website, the unwieldy beast, spoken of in hushed tones as “The Board,” employs over 400 Ph.D. economists. “The System,” which includes The Board plus a dozen regional reserve banks, has over 1,000 economists on the payroll.

And what, gentle reader, has the public reaped for all this academic mustache twirling and pointy-headed brow furrowing? What masterful guidance have the chosen few delivered to the innumerate, unwashed masses?

What sacred oracle was Greenspan consulting, for instance, when he declared, in 2005, while the sublime mortgage crisis was brewing in the cauldron:

“Although a ‘bubble’ in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.”

What omniscient intelligence was his successor, Benjamin Bernanke, channelling when he said, in 2007, on the eve of the sub-prime collapse and ensuring global financial crisis:

“We believe the effect of the troubles in the sub-prime sector … will likely be limited, and we do not expect significant spill-overs from the subprime market to the rest of the economy or to the financial system.”

What dials and knobs was Jefe Jerome Powell fiddling when, in 2021, right before inflation skyrocketed to its highest level in nearly a half century, he told the press gallery plebeians:

“As the economy reopens … we expect that as the economy reopens … we will see inflation move up … but these effects are likely transitory.”

Would that these wise sages were merely running one of Mamdani’s soup kitchens “city-owned grocery stores,” where the fallout from their unbridled arrogance might be contained to a mere mop-up in aisle three... or a few bare shelves in aisle seven.

That these featherless bipeds were given the keys to the system, the ability to control the price of money itself (by setting interest rates and, therefore, determining the cost of borrowing and the reward for saving), is the very reason we have the term “systemic risk.”

Right now, American taxpayers are concerned that they are not getting all the government they (are forced to) pay for. As Will Rogers once said, they ought to be thankful they’re not getting any more.

Next time, a tale of another government shutdown at the other End of the World… only, this one’s not a consequence of political ineptitude, but an expression of the will of modern politic’s most overlooked constituency: the people.

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And as always, stay tuned for more Notes From the End of the World...

Cheers,

Joel Bowman

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