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Tuesday, February 19, 2013

You Can't Handle the Truth!

As Ron Paul once said, "Truth is treason in the empire of lies." Or as Jesus said, "Amen I say to you, no prophet is accepted in his own country." (Luke 4:24). I could probably go on, but the point is that sometimes the truth is inconvenient, and very often we don't want to hear it. We're so set in our ways, even if those ways are wrong, that we don't want to hear that we're wrong. We want positive affirmation, even of our misbehavior, and we get upset if people call us out.

I heard someone recently talk about how children have an innate sense of truth. If you're fat, they'll tell you so, that's just what they do. They're not conditioned to lie. Only as we grow older do we begin to hide the truth, sugarcoat uncomfortable things, and eventually tell lies and untruths.

Governments today have a particularly hard time dealing with the truth. Those in positions of power want to surround themselves with sycophants and yes-men. In their minds, they can do no wrong. Only they know what's best for the poor, benighted sods who vote them into office. This is the attitude that breeds the Bloombergs, Bushes, and Obamas of the world. This is what breeds the nanny statists who want to outlaw the consumption of marijuana and Big Gulps, ban guns, and regulate how low a man is legally allowed to wear his trousers. There is nothing too picayune for these busybodies in which to involve themselves.

But I digress. The important thing is that our "leaders" don't want to hear the truth. They want to hear that they are always right. And if somebody should dare to tell them otherwise, they fly off the handle. For the most part, they get their way. But every now and then, the truth has a funny way of making itself known.

This is particularly true in the field of economics. You can only do so much to suppress reality in economics before the force of the market makes itself known. It may take 75 years as in the case of the Soviet Union, but it will happen. And all the talk of green shoots and the economy rebounding is just that, empty talk. It's an attempt to assuage the everyday man whose investment cash is used by the big Wall Street banks to play their financial games. Lull the sheeple into thinking that everything is hunky dory so that they'll be easier to slaughter. God forbid anyone should realize just how screwed up our financial system is and badly our economy will tank once the Fed's reflation bubble bursts.

Look at the transcripts of the Federal Open Market Committee that were just recently released. How many economists, Austrian and non-Austrian, were pointing out the dangers of what was clearly a housing bubble even before the financial crisis, yet even by the end of 2007 the policymakers tasked with economic central planning were completely clueless. I suppose one can't blame them, since they're only human, but it would be nice if someone would draw the obvious lesson from that and realize that it is completely senseless to put 12 people in charge of a multi-trillion dollar economy. Hayek's Nobel Prize acceptance lecture ought to be required reading.

I'm reminded too of how Treasury Secretary Geithner was laughed at by Chinese students when he told them that dollar-denominated assets were a safe investment. He was parroting the company line that is swallowed hook, line, and sinker by American government leaders and mainstream investment advisers. The dollar is safe and strong, and Treasuries are a great investment backed by the full faith and credit of the United States government. You know, the government that promised land to its soldiers and reneged; the government that signed treaties with the Indians and then slaughtered them mercilessly; the government that defaulted on its gold bonds in the 1930s. It's no wonder the Chinese students laughed, they can see right through the lies. They're like children, they can see right through the deception, unlike Americans who will themselves to swallow these lies rather than risk the destruction of their entire worldview.

And how do those in power and their sycophants treat those who tell the truth? Just look at Peter Schiff and how he was treated before the financial crisis. Look at how the Greek government is going after the head of the statistics service ELSTAT for publicizing the true size of the Greek government's fiscal deficit. Or how Argentina is cracking down on the publication of private measures of inflation which show inflation rising at nearly 30% per annum, a rate far higher than that reported by official government sources. And then of course we have the exchange rate of the Venezuelan bolivar, which even after the recent devaluation is still far more undervalued on the black market than on official markets.

Government will do everything they can to keep the lies going, because they are constitutionally incapable of facing the truth. They would rather deceive themselves and others than acknowledge what is plainly true. In fact, you can pretty much assume that the truth is the opposite of whatever a government agency is telling you. Government says GDP is up and unemployment is down? That means we're probably in a recession. Afghanistan is under control? That means the Taliban is running everything. So what to do about it? Good question. But it's late, I'm tired, and I'm probably rambling at this point. Maybe I'll delve into this further once I can keep my thoughts straight.

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