Whenever I hear Jerome H. Powell, chair of the Federal Reserve (Fed), explain how and when he will adjust interest rates as a lever to adjust what is supposed to be a free-market system, I think about the dumb world we have created for ourselves.
First, the need for serious intervention means our free-markets are not free at all. Second, it means those “markets” do not work in a laissez-faire manner. Third, it means we sell ourselves a bunch of lies. Fourth, it means we have no clue what we are doing. Fifth, we should not preach to the world how to follow us. Sixth, we should seriously investigate the foundational principles of how we build our house of cards.
Just look at the graph provided by the U.S. Bureau of Labor Statistics, covering the prices of consumer goods and services from 1997 – 2017, before the current timeframe we now tag as inflationary. You will notice how the most basic services to improve the quality of life during that period have increased dramatically, despite income not rising significantly.
None of the services, such as college tuition, education, childcare, medical care, and household energy, are affected by changing interest rates. But they dramatically affect the purchasing power of American citizens.
My point is; the dials Jerome Powell adjusts merely affect the count of what cannot be counted on, for numbers are a measure of consequence, not a matter of cause. Confounding consequence with cause leads to grave depravity of reason we can all witness on the many television shows that feverishly cover the dumbfounding faith in the counter-measures to inflation.
We must address the cause of the lack of human efficacy perpetuated by the integrity of the systems, in the words of Albert Einstein, that determine what humanity can discover. Since we built the wrong systems for humanity, there will be no end to the convulsions of human depravity.
It is high time we build a new operating-system for humanity, one that will systematically improve human adaptability to nature’s entropy. One that will eventually require less of the services we currently rely on because the improving strength of human renewal will gradually deem them unnecessary.
Humanity –for the first time– must learn to play nature’s game and stop pretending the pace at which we exchange money is relevant or beneficiary to our evolution. Even money is a consequence of trust in value, not a cause.