July 19, 2013
Decades ago, John Maynard Keynes famously wrote in his book The General Theory:
“If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines. . . and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again. . . there need be no more unemployment.”
To Keynes, all that mattered was that people were employed doing something, anything. The quality of employment didn’t matter.
Clearly this line of reasoning worked out well for the Soviets; as was said of their economic system producing mounds of left boots with no right boots, “We pretended to work, and they pretended to pay us.”
Today, famous Nobel Prize-winning economists like Paul Krugman echo Keynes’ sentiment.
Krugman has even suggested that spending trillions of dollars to defend against a phony alien invasion would save the economy.
This, coming from a man who has won society’s most ‘esteemed’ prize for intellectual achievement.
Given several years of a ‘print money with wanton abandon’ monetary policy, it seems like Ben Bernanke goes to bed at night with Keynes’ General Theory on his bedside table.
But following these principles, Mr. Bernanke has backed himself into a corner. He has printed so much money that the mere suggestion of scaling back his bond-buying program sends financial markets roiling.
He’s now forced to speak from both sides of his mouth– on one hand suggesting that he will “taper”, and on the other hand that the Fed is “by no means on a preset course.”
In other words, they have no plan or exit strategy. They’re just making it up as they go along.
Bernanke further claims that his money printing and bond buying will remain in effect until the unemployment rate falls dramatically.
This is a perplexing qualifier since unemployment remains quite high despite trillions of dollars created over the last few years.
Considering that the ‘quality’ of jobs doesn’t matter in this Keynesian worldview, though, I’ve come up with a simple idea.
The Fed is now printing $85 billion / month… roughly $1 trillion annually. So if they really want to move the needle, I propose that Mr. Bernanke cuts out the middleman (i.e. the ‘economy’) and hires workers himself.
To do what, you might ask?
Count. Specifically, count the amount of money he’s creating.
It’s simple. You assign everyone a range of numbers and have them count as he prints.
On average (I’ve tested this), it takes about 5-6 seconds per number.
Sure, one two three four is quick. But how long does it take to say 16,847,512,971…? (You’re saying it right now, aren’t you?)
I’ve calculated that it would take a special workforce of roughly 1 million people, including supervisors and support staff, in order to count the amount of money that Mr. Bernanke is creating.
This assumes that these folks count eight hours per day, with two weeks of paid vacation and ten federal holidays. This is, after all, a cushy financial sector job.
At $50,000 per worker, Bernanke would be adding substantially to the economy… not to mention really moving the needle on the unemployment rate.
“Oh but this is ludicrous…” Of course it is. And so is conjuring trillions of dollars out of thin air to monetize the debt.
And it’s a hell of a lot easier than putting together an alien invasion hoax. Besides, I’m sure the government could never bring itself to stage a false flag operation. Not in the Land of the Free… right?