The Problem with Having Managed Economies
There is probably no nation on earth that has a completely free economy. Although most western countries are nowhere near what it is like in China or the old Soviet Union, things have gotten pretty bad. The central banks of most western nations now assume that they have a duty to manage the general direction of the economy.
Whenever a government tries to manage markets, the typical result is a disaster. President Erdogan of Turkey has been fixated on strengthening his economy by lowering interest rates. This move has caused the national currency to rapidly decline in value.
Erdogan’s fervent belief that high-interest rates cause inflation is why he refused to abandon his crazy plan. The more the Turkish lira plunges in value, the more Erdogan screams for lower rates.
Turkey’s consumer prices have soared by the highest rate since 2002. Independent economic institutes such as the Inflation Research Group (ENAG) calculated last month’s annual inflation rate at 82.8 percent. Erdogan did cause the value of the lira to briefly soar when he announced that Turkey’s central bank would ensure the value of people’s bank accounts. It quickly dropped again when it became clear that the central bank could only accomplish this task by printing vast quantities of the lira.
After the Federal Reserve declined to guarantee its loans as it did for Bear Stearns, the bankruptcy of Lehman Brothers triggered a cascade of other firms to become insolvent. From Lehman Brothers on, no other large financial firm was allowed to go into bankruptcy. Even banks that were in good shape would be given huge amounts of money.
The Federal Reserve has rapidly gone from helping the financial system when it gets into trouble to managing the markets from almost a day-to-day basis. If the stock market goes down 500 points, alarm bells sound at the Fed, and the Plunge Protection Team starts buying S&P futures. Another way that the Fed regulated stock price is by giving money to member banks that pass it on to Hedge funds that buy up stocks.
Over the past few weeks, I’ve been reading up on the source of government taxes. From listening to various experts on the financial system, I’ve learned why the stock market and real estate are so important to the government.
In the early days of American history, the federal government’s income was raised primarily from taxes it placed on imported goods. It wasn’t until World War I that people started paying income tax. As time passed, more and more people were paying fewer taxes. About half the people in America don’t pay any federal taxes.
The government gets a huge amount of its income from the sale of homes and stock. During the Financial crisis of 2007–2008, the IRS lost 35% of its tax receipts from the decline in home prices. The only direction that equity prices are allowed to move is in the up direction.
All this pump by the Fed has created a massive stock bubble on Wall Street. Apple Inc. just became the first company to have a $3 trillion stock price. Five years ago, Apple was only worth $500 billion. A six-fold return for a company this massive in size should not be possible, but now on Wall Street, any valuation gain can happen. Tesla’s 23-fold rise makes Apple look like a “dead money” stock.
If it wasn’t for the COVID-19 stimulus spending, Washington could have had a huge surplus. That’s not how federal money spending works. Give any government $200 billion, and it will spend $350 billion. If Elon Musk cashed in his $340 billion in stock and had to write a $100 billion check to the IRS, we would soon be another $1 trillion deeper in debt.
The greatest danger is that soon few people will be writing checks to the IRS from their capital gain sales. Vast numbers of people have stock on margin that is at levels worse than the 1929 crash. Millions of employees are rich, on paper, because they were issued options as payment. Many people who own real estate borrow against the equity value of one home and buy another one.
The global financial system has survived so many crises in the past 14 years, I can only conclude that the hand of God is holding things together. Terry and I talk about this situation many times, and we can only presume that this monetary madness has a connection to the rapture.
“But ye, brethren, are not in darkness, that that day should overtake you as a thief” (1 Thes 5:4).
Woke or Awake?
Lou Dobbs, a long-time broadcast pundit on issues and events of the day, and his guest, Eric Metaxas, were discussing the guest’s new book, Is Atheism Dead? The conversation turned to the way culture in America has become victim of insane thinking wrapped in the term “woke.”
Dobbs offered, optimistically, that he had seen his own church and his pastor beginning to awaken. The congregation was awakening to the evil of things going on that were, through the insanity of woke wickedness infecting American culture and society with a deadly virus spawned by neo-Marxists, determined to change the nation into a Soviet or Maoist-style tyrannical state. He said that we are awakening to what is happening. The attempted Marxist cultural revolution is being made manifest for Americans to see. There is, he believes, still a considerable majority of such patriots to prevail against the globalist efforts to bring America down. The founding fathers, he said, knew that we the people need God, thus built into the founding documents that reality and provided ways thereby to deal with such assaults. God has His hand on the nation, but we must exercise our courage to keep the nation as founded, was his exhortation.
Dobbs and his guest, like we do in presenting these commentaries over the months and years, discussed the upside-down thinking of the leftist radicals at the forefront of the woke insanity: how it all got started with the takeover of the public educational system, with Marxist becoming ensconced in the institutions of learning, and the ideological contamination then spreading from K to 12.
Study of the real disciplines—reading, writing, arithmetic, biology, etc.—under woke-ism has been cast to the rear of educational prerequisite. Now it has come to be that CRT (Critical Race Theory,) GLTBQ, and other crazy inculcation grips children in years as young as kindergarten.
Parents are attacked by the governing elements at every stratum, from the federal level to the local school board, for daring to assert that they, the parents, should influence curriculum. Concerned parents have been labeled as “domestic terrorists” for showing up at school board meetings, demanding that their children not be taught CRT or not be subjected to boys and girls sharing the same restrooms or locker rooms at the same time.
We have all been aware of these news stories. And unless we’ve tuned to mostly secondary news sources, not mainstream news outlets, we’ve been bombarded by news slanted so that we are made to seem like the lunatics for disagreeing with the woke culture, and the perpetrators of the woke culture are made out to be the enlightened, sane ones in today’s America.
Lou Dobbs and his guest had to admit that with the ubiquitous mainstream news and the governments in the hands of mostly woke types in many cases, it would indeed be a fight to awaken the numbers of Americans necessary to overthrow this evil. However, such a revolution of change back to sanity was possible with the awakening taking place because of the woke evil in our faces constantly.
One such news item seems to somewhat support the contention.
A majority of Americans say that male and female are the only two genders, and that schools shouldn’t be allowed to counsel children about gender or sexuality without parents’ consent, according to the results of a survey released Monday.
The survey was conducted by Rasmussen Reports among 1,000 American adults from Dec. 21 to 22, with a margin of error of plus or minus 3 percentage points at and 95 percent confidence level. It comes amid a social media firestorm sparked by Harry Potter author J. K. Rowling, who was accused of engaging in “hate speech” for insisting that there are only two biologically distinct genders.
“Transgender activists have accused J. K. Rowling of ‘hate speech’ for saying it, but most Americans agree with the Harry Potter author that there are only two genders,” the report said. (“Most Americans Don’t Trust Teachers, Schools With Children’s Gender Identity: Survey,” by Bill Pan via The Epoch Times, ZeroHedge, December 30, 2021)
Despite the encouraging survey result mentioned here, I must say I can’t match Mr. Dobbs’ optimism. I believe that the year 2022 finds this generation in America and on the earth too far into the reprobate mindset of Romans 1: 28. Rather than seeing a great move within our churches and among our pastors to begin rectifying the cultural rot through turning to God in all the Heaven-prescribed ways, the church as a whole looks the other way to different priorities. The evil and wickedness manifest through this thing called woke run rampant. Our God, through Isaiah the prophet, put it this way.
Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter! Woe unto them that are wise in their own eyes, and prudent in their own sight! (Isaiah 5:20–21)
This condition of seemingly incorrigible corruption as we face 2022 seems to match Jesus’ words about His sudden intervention into the affairs of mankind, when things will be like they were in the days of Noah, and again in the days of Lot.
It is incumbent upon each Christian who reads this to seriously consider whether we are woke or awake. There might not be a Great Awakening taking place as secular pundits such as Mr. Dobbs and some religious personages apparently believe. As a matter of fact, I’m convinced there is no such movement coming. But it is time for each Christian to awaken to the fact that Christ’s Second Advent is blazing across the prophetic horizon.
First there must come a time of horror such as has never been or will ever be—according to Jesus Himself. That is the reality facing all of humanity–with the exception of those in God’s family.
It is time to be awake to how near is Christ’s call to His own in the air above this judgment-bound planet. This individual awakening should inspire each of us to do our utmost for His highest, as Oswald Chambers put it.
What a glorious eternal day it will be to hear our Lord and Savior say, “Well done, good, faithful, servant!”