Not precisely a depression

Various scary US job and economic performance graphs have been emerging this month, and that's kicked over various Great Depression comparisons.

The Great Depression happened because of a misuse or misunderstanding of the machinery of finance, so that the overall economy wound up underutilized not for lack of stuff to do or ability to do it but for lack of ability to do it profitably.

What's happened this time is that since about 1980 or so, there have been two economies; the actual, real, import replacing one (which includes some real "knowledge work"; computer programming and industrial design, say) and the fake one that's been supported by the betwixt-theft-and-counterfeiting abuse of fractional reserve banking "financial engineering" approach.

Money has no independent reality; it depends on something delivering material value somewhere in the financial activity chain. And there is no, and no possibility of, any real value attached to the great majority of the money products of that abuse-of-banking economy, no matter how much wealth it appeared to generate.

Since the nominal inflation rate during that period, particularly the last decade or so, has remained low despite what was effectively widespread counterfeiting—maybe 15% of the total US nominal GDP has been based on abuse-of-banking—which means that a lot of the currency creation going on has been on false pretenses, which would normally trigger inflation just as surely as a government running the printing presses would. It hasn't, so either information hasn't cleared or the real situation is deflationary.

Throw in that in import replacement terms the US economy hasn't grown since about 1980, and that the greater part of its creative ability has been sucked into defense applications which are economic net negatives, and I have this awful suspicion that the nosediving employment numbers are moving to conform to the size of the actual, without-abuse-of-banking economy. Which is at most about 70% the size people think the US economy is.


Which is not actually a total diaster in some happy theoretical land with ideal people who will recognize that money isn't value (value is a ratio of cost to benefit; good value is when you get proportionally more than you'd expect for the price, compared to some market environment, whether that's retail shopping or investments) and economies really do run on import replacement which implies an ability to make, fix, and improve real things, rather than abstractions, and that there just isn't as much profit involved. (On the plus side, there's no inherent ghastly collapse.)

We don't live in that happy theoretical land. We aren't, baring a major miracle, going to see anything like effective action in the US, especially since a major US political faction wants to prove a false free market model works, and will accept any cost in preference to acknowledging their error, since that model justifies their understanding of class and the privileges they derive from their class membership. Which means the US will probably hit something like 30% unemployment, becuase there isn't all that much economy actually there, and this will become obvious as the massive insolvency starts to become known.

Which is a screaming shame, becuase it's not at all inevitable; just the (utterly vital for unconnected reasons) concerted effort necessary to replace the fossil carbon energy infrastructure would also and happily solve the economic problem.