| The Jackson Hole conclave of central bank chiefs | | | | choose. With the industries go the jobs, services, |
| came and went, leaving hardly a ruffle behind. The | | | | investments and taxes. |
| remarkable fact is that it had so little effect, despite | | | | In other words, whatever the government does |
| the much expected speech on the U.S. economy by | | | | might have a bigger impact in another country than it |
| Mr. Bernanke of the Federal Reserve Bank. | | | | does in the United States, and much of the money |
| Mr. Bernanke's main field of study as an academic | | | | spent will end up in China rather than Virginia or |
| economist has been the Great Depression. As the | | | | California. The same happens to jobs, whether they |
| current "Great Recession" developed the Fed's | | | | are existing ones that disappear abroad, or "newly |
| primary concern therefore was to avoid the policy | | | | created ones", which materialize directly in foreign, |
| mistakes that turned the 1929 stock market crash | | | | low-cost locations. |
| into a disastrous ten-year downturn. Chief among | | | | The U.S. government and the Fed are pumping air |
| these errors was the failure to provide abundant | | | | into a leaky tire. Unless the leak is fixed, they can |
| liquidity to the financial system. | | | | pump for years, but the tire - our economy - will |
| Accordingly super-abundant liquidity was provided this | | | | stay flat. |
| time around, under the form of an intensive bank | | | | U.S. authorities are treating the economy as if it was |
| bailout, huge deficit spending, the creation of money, | | | | a constant entity, to which government spending can |
| zero interest rates and a raft of financial facilities. As | | | | add, thereby creating growth. But the economy, and |
| a result there was, initially, an economic bounce. But | | | | the wealth that goes with it, are no longer tied to |
| as this "recovery" now appears to be rapidly fading, | | | | the national territory and its population. Because U.S. |
| the question bears asking: "Everything that should | | | | political and economic leaders have chosen to practice |
| have been done has been done, but the effects are | | | | an "open border" economic policy, wealth and activity |
| not up to expectations. Was something missed?" | | | | have been flowing out for the past two decades. As |
| Yes, it was. While study of the Great Depression can | | | | a result, many "American" corporations have more |
| certainly teach us a lot, it was over 70 years ago. | | | | interests abroad than they have here. They will |
| Today we would not make a study of transportation | | | | invest, and create jobs, where their interests are. |
| on the basis of 1930 technology. At that time air | | | | If it is more profitable, short-term, to manufacture in |
| transport was a minor factor. Today it is a major | | | | China, that is where investments will be made. Profits |
| one. | | | | will rise (and they have) but so will U.S. |
| In a similar vein, in 1930 our economy was almost | | | | unemployment (and it has). The Fed will keep the |
| entirely national, and all its components were within | | | | money printing press running, and the administration |
| the reach, if not the control, of federal authorities. | | | | will increase the deficit, and the "jobless recovery" will |
| Today's economy is globalized. | | | | go on, until something gives. |
| Global finance means that the sums moved daily | | | | If we want a real return to prosperity, we need to |
| around the world by private interests (many of them | | | | deal with this issue. Otherwise we will slide into |
| speculative) dwarf anything the U.S. government can | | | | another depression, with all the consequences this |
| muster. Foreign exchange transactions alone involve | | | | entails, political as well as economic. |
| $4 trillion per day. In other words, the value of our | | | | Globalization has been presented to us as progress, |
| currency is out of the government or anyone else's | | | | the "next economic thing", the way to world |
| control. | | | | prosperity, and so on. Given the situation that the |
| Global "free trade" translates into entire industries | | | | world economy is in, as well as our own, we need to |
| being transferred, within a few years, to whatever | | | | reconsider. |
| locations multi-national company executives may | | | | |