“At that moment, the Chinese rural economy — the only one it ever really had — was prostrate under the weight of 45 million dead from starvation, and far more debilitated and destitute. By underwriting a 40-year debt supercycle, however, the newly unshackled Fed fueled unstinting American demand for the output of East China’s rapidly expanding export factories…
“In so doing, it also drained China’s stricken rice paddies of their nimble young fingers and strong young backs by the tens of millions. Willing to work Dickensian hours for quasi-slave pay rates, this army of refugees from Mao’s mayhem put the world’s wage and cost structure through a three-decade long deflationary wringer.
“In this context, a clue to the next phase of this saga may lie in the conterfactual. Had Nixon kept the gold window open, China would have accumulated bullion, not bonds. America would have experienced deflationary austerity, not inflationary bubbles. And fiscal deficits would have mattered. Thus, today’s terminally imbalanced world has evolved at complete variance with the outcome that could have been expected under a regime of sound money.
“The risk is that the doomsday system for global money and trade that has metastasized since 1971 may be approaching its endgame. By all appearances, Mao’s great rural swamp has now pretty much been drained.
“Global wages will therefore start rising, because even Walmart has not been able to discover another country inhabited by millions of one-dollar-per-day workers.”
“Mark Phillips Here is Dave Stockman’s lecture discussing/summarizing some of the core points in his forthcoming book, the working-title of which is *The Triumph of Crony Capitalism*. Arguably, however, the best solution to all this is, at least in part, a radical reconsideration of American socio-economic/financial institutions. In this vein, it is imperative that the ideas of Louis Kelso, and his intellectual heir, Norman G Kurland be given a very, very serious and thorough investigation (as they’ve been shamefully underappreciated for decades…).”“Norman G Kurland Mark, I met with David Stockman when he was on the staff of John Anderson, then a Republican leader in the House. He offered no criticisms then of [Louis] Kelso’s ideas but never showed the intellectual boldness to advance our basic changes to the current tax, monetary and other laws that perpetuate monopoly capitalism. Is he waking up?”
What does it take to open the eyes of a Dave Stockman and others to the obvious solution: reform the “system” to broaden private ownership of productive capital to ALL Americans and eliminate special interests? David Stockman was director of the Office of Management and Budget under President Ronald Reagan.
http://mises.org/daily/5113/The-End-of-Sound-Money-and-the-Triumph-of-Crony-Capitalism
