Wealth Creation It Isn’t
February 18, 2010 – 8:01 PM1. Jobs, Stimulus Bills and Talking Points: Economic Doublespeak
When Fed Chairman, Fred Barnanke, sat before a Congressional Committee not too long ago, he was asked about the (infamous) Obama Stimulus bill, not then a year old. You know the bill. It’s the one that purportedly created jobs for the economy. In fact, President Barack Obama hailed the one-year-old economic “stimulus law” as a measure that “…staved off another Great Depression and kept up to 2 million people on the job.” (Note the language, “kept people on the job”, not “brought back MORE productive jobs”).
Anyway, a funny thing happened on the way to the alleged “jobs creation.” The banks got the lion’s share of the money. When Fed Chairman Fred Barnanke answered the above-cited Congressional question, he answered that the money went to the banks. When asked “What happened to the stimulus money after that…” he replied, “I don’t know.”
Hum… Let’s see if I have this right. The President says the stimulus money “…staved off another Great Depression and kept up to 2 million people on the job.” But, the guy who is supposed to know the nation’s money issues – I mean, it’s his JOB to KNOW THE MONEY and where it goes (!) – said he DIDN’T KNOW where it went AFTER THE BANKS got it.
So, what does the President, who during his election days, slipped up on more teleprompter retorts when the issues were “economic”… again, what does the President know that the Fed is SUPPOSED to know but DIDN’T? More doublespeak, that’s what he knows.
2. Jobs and Stimulus Bill: Fish … or Teach them to Fish?
First of all, let’s clear the air. As author G. Edward Griffin showed by his title of the second chapter of his book, Creature from Jekyll Island, “The Name of the Game is Bailout”… bank bailout. The banks got … and kept the money for their own financial “well-being”.
The problem is simple. Let’s say that President Bareconomic really does know what happened to the money. What should that mean to us? Well, no surprises here, “get rid of the Federal Reserve” because it hasn’t done its job, nor is it even able to keep track of the money (Actually, I don’t believe the latter point. But that might involve the “conspiracy” word.).
But, the real lesson is a simple one: The President’s real damage to the economy involves several basic economic issues:
- Stimulus bills producing fiat money create inflation.
- Stimulus bills producing fiat money send false “Demand” signals to the business sector which responds to the false signals by investing in (unneeded) inventories, gearing up for “recovery”, or so they think.
- Stimulus bills producing fiat money distort economic recovery by misdirecting valuable economic resources through the false information system the money supply sends to us. Remember, money’s great role is as the prime information system for demand and supply decision-making.
- Stimulus bills producing fiat money creates factions who lobby and pressure to come out on top, thus dividing society along lines of (stimulated) envy and greed.
But, the worst thing stimulus bills producing fiat money do is to destroy the true job-creating sector of the economy and hand out non-wealth creating jobs. Jobs which are simply government handouts do NOT create wealth. They do not create profitability… you know, the kind of wealth companies need to invest into more productivity, thus creating the economic necessity for jobs which will help them build more wealth.
Government handouts hurt everyone, by helping create some jobs TEMPORARILY. But, they are not wealth creating jobs… meaning, they are not created in response to true economic demand (the laws of human action) to which business enterprise responds by hiring jobs to be done which will create more productivity.
3. AND… LOSS of Jobs
Stimulus bills create inflation… a devilish information system that misdirects resources and creates the infamous “boom” cycles. Businesses expand production and find out the demand signals were false. Damaged businesses and wealth are the results. Loss of jobs.
Stimulus bills of fiat money raise prices … driving marginal producers out of business. More damage, more loss of jobs.
Stimulus bills of fiat money distort economic recovery by misdirecting consumer purchasing. Consumers end up in vicious cycles of debt accumulation which leads to consumer loss through compounding interest. Notice how much economists watch the Consumer purchases each month. Why? If consumers are damaged, businesses suffer losses. Losses mean more cuts to employment … MORE Jobs are lost.
INSTEAD of Stimulus bills of fiat money that distort economic recovery by misdirecting valuable economic resources through the false information system, why not STOP this inflation-central bank fraud, and allow businesses to recover… allow consumers to recover… and allow the economy to recover? To do that, stop all the taxes, and fiat – inflation, while stripping out the debilitating regulatory chains that bind the economy. Protect businesses from further bank induced fraud. Let the businessman create more jobs by recovering … not by “directing” him with more misdirected economic “indicators”, producing more inflationary (depreciating) money, piling on more taxes on top of taxes, and adding mounds of regulatory edicts that restrain productive enterprise.
Stimulus bills create Job loss. Let the banks keep the stimulus money! Then close them all.
- Submitted, Wayne C. Sedlak, ICHR
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10 Responses to “Wealth Creation It Isn’t”
Watching this whole thing unfold is like watching a puppy chase its tail. The puppy really thinks its going to catch it and has no idea why your laughing at him.
They know where the money is going. So do other people.
In the past four Treasury auctions indirect buyers (foreign buyers) accounted for approximately 40% of the purchases. In last Wednesday’s Treasury auction indirect buyer purchase was down to 29%. The Asians (China & Japan) aren’t buying Treasuries in fact they are selling them. Direct buyers, those who buy direct from the Treasury and these sales are unreported and untraceable accounted for 24% of the purchases. A record high amount of Treasuries purchased by unknown buyers and news of it never made The Wall Street Urinal, sorry, I meant Journal… Is the puppy chasing its tail?… Quite likely.
By Louis Chama on Feb 18, 2010
Interesting how all these EU nations are in debt and defaulting, but the same old game is being played…
Print the money, and cross your fingers that all things end up well.
Thank you for your articles on socialism, this all plays hand in hand to fuel an economy of theft and lies.
By Robert on Feb 18, 2010
Dear Sir:
I was glad to see that the understanding of money as a way to communicate. It is helpful to know inflation as both robbery and deceit. It is also instructive to think of this stealing and lying in terms of people responsible for the theft and dissimulation. Too often these observations are made in passive terms, not active.
What is frustrating is that there seems to be no system large or powerful enough to bring the lawbreakers to justice.
I observe that if one breaks the law one time, then the punishment is simple forms of restitution. If one is a habitual covenant-breaker, the punishment is death. (Deuteronomy 17:12)
If a church member is guilty of continually disregarding a legitimate decision of lawful elders, he is excommunicated.
How can our civil society justly require restitution and honesty from our “friendly feudal federal bankers” and their “Resident” overseers? Who is able to enforce compliance? How?
Respectfully,
The Druid
By The Druid on Feb 19, 2010
Thanks, Mr. Sedlak,
I wonder how many people have read the current book, “They Own It All, Including You: By Means of Toxic Currency” by authors Ronald MacDonald and Robert Rowen. It is very scary, and they propose that this fiat money we all use, is really “The MARK OF THE BEAST” !
They blame FDR and his removal of our citizens from the Gold Standard, outlining how we have just gotten further and further in financial trouble since 1933.
It’s a relatively fast, and fascinating read, and will open a lot of eyes !
Thank you for bringing our attention to the real cause of, and practical solution for, our unemployment problems, while our Government officials keep playing with “smoke and mirrors”.
It’s more in their interest to keep up the facade and the rhetoric, than it is to do the hard work of fixing the situation. Besides, think of the “face they are saving” ! After all, they cannot ever be wrong, right?
Always remember, more people would rather be “right” than President. Although, our current usurper would rather be BOTH !
Most Sincerely
Nancy Jo
By Nancy Jo on Feb 19, 2010
Nancy Jo,
You are correct, as always! Good post.
The problem is, of course, that the longer the government is allowed to continue these destructive economic policies, the longer it will take to recover, and the longer – and deeper – families will suffer.
Thank you as always… God Bless,
Wayne
By Administrator on Feb 19, 2010
Dear Druid,
One of the most important functions of money is as a communication / information system. Money sends price and cost signals everywhere (Incidentally, your “cost” is someone else’s price(s)). Think how you use pricing on a daily basis for your decisions:
1. You decide upon WHAT to purchase … or not.
2. Price of gas determines often where you will go… therefore, what you will do.
3. Price tells you what the Dow Jones is doing – and stocks, bonds, and investments of all sorts shift trillions in money (including artificial wealth) in and out of accounts worldwide.
4. Prices tell you the economic health of consumers, retailers, investors and markets worldwide… and locally.
5. Money moves budgeting considerations.
6. Prices, costs, determine daily what markets a business will enter… leave… or refuse to consider (Laws of human action – Demand and Supply).
7. Because of #6, prices allocate economic resources as businesses purchase resources for markets they will target (Laws of human action – Supply).
8. Because of #6 and #7, prices will allocate labor, as businesses will purchase your work as resources for the jobs they are targeting. Therefore, prices determine the building of real wealth in response to the laws of demand and supply. (Laws of human action – Demand and Supply).
9. Prices are signals for economic decision-making at all levels. Such prices are the ONLY way to guage market activity as a whole, short of speaking with every single person in your area of interest … and all at once (which is impossible in most cases).
10. Socialism is a COMMAND system. Thus, it ignores/condemns pricing systems as a function of “capitalism”. As a command system, socialism must allocate all resources to all parties on a day by day, decision-making basis. This involves billions of decisions daily… an impossibility. Therefore, such governments COMMAND and dictate POLICIES, knowing they do not have the time and resources to think through and evaluate RIGHT decisions for you… and all of us. Nor do they care. They can only “command”. They cannot replace the information system that pricing puts in place – which is the RESULT of the decisions to buy and sale by all consumers and sellers. Because it represents just about ALL people, the pricing system reflects and almost perfect statistical POLL of what people truly want and/or need. As such, it then allocates resources where wanted. This is not a blind market, as often charged by socialist thinkers and so-called humanitarians. It is the opposite. As is involves all consumers and sellers, it is using “ALL eyes”, not “none”. So when a country reverts to the Command system of socialism, it replaces an almost perfect scientific Polling system for a guessing, misallocation system. Thus, such socialisms are always doomed to fail. It’s a law of human conduct.
Since ALL SOCIALISMS ARE COMMAND SYSTEMS: fascism, feudalism, Corporate (institutional, american-style) socialism, Naziism, Communism, Monarchical (Kings who command economies ignorantly) command system – ALL are different kinds of command systems that are doomed to fail. They only differ on how fast they will fail, and to what extent. All such systems will eventually collapse any economic system.
-Submitted, Wayne C. Sedlak, ICHR
By Administrator on Feb 19, 2010
China has begun to sell off our debt; Japan owns more of it than China; but the biggest holder of our bonds is our own Federal Reserve. Of course it is all corrupt.
Listening to the politicians one can hear the same thought patterns; in about 3 categories; the wicked; the conservatives; and the Christians; and it’s all coming to a head. Some people are still in la-la-land but most now have become alive and are willing to do things to help.
We are Americans and our country is the only hope left, to shine it’s light across the world. Our light was beginning to fade as lights do, but we became aware of it’s waning strenght before it was too late.
We have the wrong people running our country. Too much of the population was not educated enough in truth to recognize the deceit played upon them for years; but that is being corrected. New faces are showing up to run for office and the Patriots and Christians have gathered together in appropriate groups.
On the national scene there are some Christian speakers but none have risen up yet, that I know of anyway, in powerful leadership roles. We just hear talk and some is not even correct. I think about that a lot. I wonder if someone would actually preach the true council of God, if they would be called one of those right wing loons – as Bill O’Reilly would say.
But not if God prepared His People . . .
Today we have become global and prophecy is being fulfilled. This website provides much wisdom and I pray that God’s Truth and the History of His People become known to people everywhere – and may it begin with me . . .
By CMoon on Feb 19, 2010
Thank you for the comment Louis,
Great analogy – puppy chasing the tail. Fruitless and comical, if it weren’t so tragic for so many millions of people.
You are right, as I believe Fred Barnanke knew where all the stimulus money had gone… and what they had done with it.
Thank you.
-wayne
By Administrator on Feb 19, 2010
Obama Promised Unemployment Would Not Rise Above 8 Percent With $862 Billion Stimulus. (Christina Romer and Jared Bernstein, “The Job Impact Of The American Recovery And Reinvestment Plan,” 1/9/09)
* REALITY: Unemployment Currently At 10 Percent. (U.S. Bureau of Labor Statistics, http://www.bls.gov, Accessed 2/4/10)
Obama Promised His Stimulus Would Create 3.5 Million Jobs By End Of 2010. (President Barack Obama, Remarks At The Signing Of The American Recovery And Reinvestment Act, Denver, CO, 2/17/09)
* REALITY: Since Obama Signed Stimulus Last February, America Has Lost 2.8 Million Jobs. (U.S. Bureau of Labor Statistics, http://www.bls.gov, Accessed 2/4/10)
Biden Promised Stimulus Would Create Construction Jobs. “Road projects, energy projects and construction projects are being started as soon as they pass review, contracts are competitively bid and reporting systems are in place.” (Joe Biden, “What You Might Not Know About The Recovery,” The New York Times, 7/26/09)
* REALITY: Since Obama Signed The Stimulus Last February, 712,000 Construction Jobs Have Been Lost. (U.S. Bureau of Labor Statistics, http://www.bls.gov, Accessed 2/4/10)
Obama Claims Stimulus Created Manufacturing Jobs. “That’s right — the Recovery Act, also known as the stimulus bill. Economists on the left and the right say this bill has helped save jobs and avert disaster. But you don’t have to take their word for it — Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created.” (President Barack Obama, Remarks In State Of The Union Address, Washington, DC, 1/27/10)
* REALITY: Since Obama Signed The Stimulus Last February, 847,000 Manufacturing Jobs Have Been Lost. (U.S. Bureau of Labor Statistics, http://www.bls.gov, Accessed 2/4/10)
Obama Claims Stimulus Created Teaching Jobs. “Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed — 300,000 are teachers and other education workers.” (President Barack Obama, Remarks In State Of The Union Address, Washington, DC, 1/27/10)
* REALITY: Since Obama Signed The Stimulus Last February, 55,000 Education Jobs Have Been Lost. (U.S. Bureau of Labor Statistics, http://www.bls.gov, Accessed 2/4/10)
Obama Promised Recovery Act “Will Create Good Jobs That Pay Well And Can’t Be Shipped Overseas.” (The White House, “Remarks By The President And The Vice President On The American Recovery And Reinvestment Act,” 4/13/09)
* REALITY: Recently Distributed Stimulus Funds Going To Foreign Corporations Creating Jobs Overseas. “Nearly half of the $2.4 billion in federal grant money awarded Wednesday to stimulate the U.S. economy and boost the production of hybrid and electric vehicles went to six companies with ties to places as far away as Russia, China, South Korea and France. … But because so few American companies have the necessary technology, much of the money will initially go toward manufacturing electric vehicle batteries overseas.” (Jerry Seper, “Obama Sends Stimulus Aid To Foreign Firms,” The Washington Times, 8/6/09)
By Arnold Brescia on Feb 20, 2010
Arnold Brescia
Thank you for the article. Great post!
I would encourage everyone to copy and paste this article all over the Net: blogs, forums, emailings, websites. It has the documentation and is done for you. Make copies for your friends. Pass them out.
Thanks for the post!
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- Wayne
By Administrator on Feb 23, 2010