I'm fairly unimpressed with the field of declared Republican or "conservative" candidates for President.
And now someone new has thrown his hat into the ring, and when I read what he has to say, I feel almost hopeful:
"We don't see the role of government as guaranteeing outcomes, but allowing free men and women to flourish based on their own vision, their hard work and their personal responsibility."
Rick Perry is singing my song, first time I've heard it so specifically.
Much more to learn about this man, but I'm glad to finally here someone speaking to the error of the current administrations philosophy of government...someone is recognizing the principles behind the policies.
Maybe this race will get interesting...
Monday, August 15, 2011
Wednesday, August 10, 2011
A Book Report in Which I Passionately Go On & On...
For one of my summer books, I chose the not-so-cheerful When Money Dies by Adam Fergusson.This book is an account of the events and policies that let to hyperinflation in post World War I Germany. There’s plenty of talk about the possibility of inflation, and hyperinflation, in our future, so I wanted to learn what I could from those who had lived through such a catastrophe. How did it happen? How do you survive?
Hindsight admits that a more cheerful subject might have been a better choice for this time of year. However, I learned a lot, and I think I know what I will do when faced with the prospect of hyperinflation. (And I'm afraid it involves chickens and large garden plots...maybe some precious metals...and a big fence, definitely.)
Admittedly, there was much recorded here that I had trouble understanding…I need to do some study of economics. But there was plenty that I could grasp, and I must say that living through hyperinflation is not a pleasant prospect.
Obviously, the German situation had its special circumstances –They financed a war, lost that war, and then were obligated to other countries for huge reparation payments. This alone would be big trouble for an economy, but the Germans made assumptions and decisions that exacerbated their problems to the point of catastrophe.
As need outpaced their financial capabilities, they just printed more money...and more money.
They were very fearful of unemployment, so they kept people on the job, regardless of the fact that there was not money to pay them. Unhappy union members threatened violence and retaliation as prices rose above what their wages could buy. So the government raised the wages and printed more money to keep marks in people pockets and, more importantly, keep the unions satisfied. They maintained the jobs, but in actual fact the workers were on the dole.
People blamed producers and manufacturers (in Germany & elsewhere) for higher prices. They believed that prices were being forcibly increased, perhaps vindictively, instead of recognizing that the mark was rapidly diminishing in value. The more marks they printed, the less each one was worth; the more marks it took to buy bread.
The printing presses could not keep up with the volume of marks needed for daily commerce. New and larger denominations were being created and printed, and still they could not keep up. People on fixed incomes suffered and starved. Others bartered away their valuables, for a fraction of their worth, to survive. Businesses could not afford the cost of imported goods so supplies of daily necessities became very low. Manufacturers could not afford imported raw materials, so less and less was produced; less money was made; fewer people had work. People from neighboring countries flooded the borders to capitalize on the low value of the mark – even when the value of the mark dropped so precipitously and continuously that diners in the restaurants were quoted one price when ordering, but owed more than that amount by the time they finished the meal.
Paying taxes became problematic. By the time your documents were filed, you would find that you were liable for more than when you calculated them; and as the fall of the mark outpaced the rise of salaries, you rarely had enough money to pay the new amount.
Anyone of wealth did what they could to get it invested outside of the country so it would hold its value. “Evasion of taxation, fear of socialisation, and inflation have combined to drive capital out of countries with a depreciated currency into countries where the currency is sound or at a premium…” {newspaper article by Arthur Eichhorn, 1920}
Of course, this loss of capital only served to increase the snowball that was rapidly rolling through the entire German economy.
In the end, everyone lost. Indeed, some more than others—to best survive you needed to get your money invested in other countries with stable currency, have your own food source, have real goods to barter for what you need . Still the inflation was so severe that there were few who came through it with much of anything left to their name…And there were those who just didn’t survive.
Times were so desperate that people were willing to accept any leadership. “Economic distress is leading people to be much more amenable to authority as representing the only hope of salvation from the present state of affairs. Unemployment is taking the gilt off the gingerbread of democracy…” {Joseph Addison 1923} “Inflation is the ally of political extremism, the antithesis of order.” {Adam Fergusson}
I’ve always wondered how the German people became so accepting of the philosophy and leadership of Adolf Hitler. Reading this book has helped me understand more clearly. I would never say that the circumstances of hyperinflation caused the rise of Adolf Hitler, but they made it possible.
Finally, action was taken that stopped the freefall, but the cure was very painful. There was still much suffering ahead as the economy and the country climbed back to stable footing…if you can call the rise of the Third Reich stability.
“The immediate basis of stablisation, therefore, was not the closing down of the printing presses so much as the rigorous disciplining of State expenditure by the refusal of further credit to the government and by a return from a floating mark to a fixed parity against gold and the dollar.” {Adam Fergusson}
Certainly we do not have at play the seriously difficult circumstances that Germany did after WWI. However, I see in Germany’s story some similarities to current events…Even in the very recent downgrade of the United States credit rating because of our debt. As you read about what was done in Germany, you recognize that the same mistakes are being repeated here, on a smaller scale…for now. They are evidence of a mindset that will land us in a similar mess if we do not recognize the signs and demand of our leaders a change of course.
In the meantime, I suggest you prepare to protect yourself.
Hindsight admits that a more cheerful subject might have been a better choice for this time of year. However, I learned a lot, and I think I know what I will do when faced with the prospect of hyperinflation. (And I'm afraid it involves chickens and large garden plots...maybe some precious metals...and a big fence, definitely.)
Admittedly, there was much recorded here that I had trouble understanding…I need to do some study of economics. But there was plenty that I could grasp, and I must say that living through hyperinflation is not a pleasant prospect.
Obviously, the German situation had its special circumstances –They financed a war, lost that war, and then were obligated to other countries for huge reparation payments. This alone would be big trouble for an economy, but the Germans made assumptions and decisions that exacerbated their problems to the point of catastrophe.
As need outpaced their financial capabilities, they just printed more money...and more money.
They were very fearful of unemployment, so they kept people on the job, regardless of the fact that there was not money to pay them. Unhappy union members threatened violence and retaliation as prices rose above what their wages could buy. So the government raised the wages and printed more money to keep marks in people pockets and, more importantly, keep the unions satisfied. They maintained the jobs, but in actual fact the workers were on the dole.
People blamed producers and manufacturers (in Germany & elsewhere) for higher prices. They believed that prices were being forcibly increased, perhaps vindictively, instead of recognizing that the mark was rapidly diminishing in value. The more marks they printed, the less each one was worth; the more marks it took to buy bread.
The printing presses could not keep up with the volume of marks needed for daily commerce. New and larger denominations were being created and printed, and still they could not keep up. People on fixed incomes suffered and starved. Others bartered away their valuables, for a fraction of their worth, to survive. Businesses could not afford the cost of imported goods so supplies of daily necessities became very low. Manufacturers could not afford imported raw materials, so less and less was produced; less money was made; fewer people had work. People from neighboring countries flooded the borders to capitalize on the low value of the mark – even when the value of the mark dropped so precipitously and continuously that diners in the restaurants were quoted one price when ordering, but owed more than that amount by the time they finished the meal.
Paying taxes became problematic. By the time your documents were filed, you would find that you were liable for more than when you calculated them; and as the fall of the mark outpaced the rise of salaries, you rarely had enough money to pay the new amount.
Anyone of wealth did what they could to get it invested outside of the country so it would hold its value. “Evasion of taxation, fear of socialisation, and inflation have combined to drive capital out of countries with a depreciated currency into countries where the currency is sound or at a premium…” {newspaper article by Arthur Eichhorn, 1920}
Of course, this loss of capital only served to increase the snowball that was rapidly rolling through the entire German economy.
In the end, everyone lost. Indeed, some more than others—to best survive you needed to get your money invested in other countries with stable currency, have your own food source, have real goods to barter for what you need . Still the inflation was so severe that there were few who came through it with much of anything left to their name…And there were those who just didn’t survive.
Times were so desperate that people were willing to accept any leadership. “Economic distress is leading people to be much more amenable to authority as representing the only hope of salvation from the present state of affairs. Unemployment is taking the gilt off the gingerbread of democracy…” {Joseph Addison 1923} “Inflation is the ally of political extremism, the antithesis of order.” {Adam Fergusson}
I’ve always wondered how the German people became so accepting of the philosophy and leadership of Adolf Hitler. Reading this book has helped me understand more clearly. I would never say that the circumstances of hyperinflation caused the rise of Adolf Hitler, but they made it possible.
Finally, action was taken that stopped the freefall, but the cure was very painful. There was still much suffering ahead as the economy and the country climbed back to stable footing…if you can call the rise of the Third Reich stability.
“The immediate basis of stablisation, therefore, was not the closing down of the printing presses so much as the rigorous disciplining of State expenditure by the refusal of further credit to the government and by a return from a floating mark to a fixed parity against gold and the dollar.” {Adam Fergusson}
Certainly we do not have at play the seriously difficult circumstances that Germany did after WWI. However, I see in Germany’s story some similarities to current events…Even in the very recent downgrade of the United States credit rating because of our debt. As you read about what was done in Germany, you recognize that the same mistakes are being repeated here, on a smaller scale…for now. They are evidence of a mindset that will land us in a similar mess if we do not recognize the signs and demand of our leaders a change of course.
In the meantime, I suggest you prepare to protect yourself.
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