An Honest and Easy Solution to Wealth Inequality

Here we are, less than one month into the New Year, and absurdity levels have broken above 120 decibels.  Society, it seems, has spun itself up to a fever pitch.  The common culture is working towards a common freak-out.

This week, for example, we discovered, courtesy of U.S. Representative Alexandria Ocasio-Cortez, that: “The world is gonna end in 12 years if we don’t address climate change.”  This gifted insight was mixed between meticulous news analysis of a peaceful exchange between a smirking teen wearing a MAGA hat and a drum beating Native American wearing a costume.  But this ain’t the half of it…

The annual hootenanny for the elite, the World Economic Forum in Davos, Switzerland, took place this week.  The gathering successfully delivered many high-volume absurdities.  An impartial program listing includes:

Globalization 4.0, how cities can fight back against climate change, radically reinventing social systems, plastic pollution, safeguarding our planet, the rise of techno nationalism, media freedom in crisis, averting peak Europe, escaping extinction, when global order fails, a new deal for nature, shaping the future of democracy, and much, much more.

No doubt, the best and the brightest at Davos see these constructed ails as opportunities to provide technocratic solutions – at your expense.

Amongst all this noise, however, we’re after something different.  Our aim today, first and foremost, is directed at the valuable commodity of silence.  We don’t get enough of it.  We need more of it.

One area more silence is needed is the federal government.  In contrast to the small and quiet government envisioned by the nation’s founders, today’s gigantic federal rule is full of much clatter and racket.  Yet some progress is being made.

The government shutdown is a good start for ever so slightly quieting Washington.  At the moment, roughly 800,000 federal workers – through no fault of their own – are furloughed or working without pay.  And should the government shutdown extend for several more pay cycles, many of these workers will look for private employment.  This, in effect, will reduce the number of workers on the federal payroll.

Still, this is only a start.  You see, real silence takes real silence.  The real silence we’re referring to is the real silence of nearly 100 years ago…

Silent Cal

Calvin Coolidge, the 30th president of the U.S., was a man of few words.  As Vice President, under Warren Harding, Coolidge attended, but hardly participated in cabinet meetings.  He was actively practicing his position that government should interfere as little as possible with businesses and individuals.  This silence earned him the nickname “Silent Cal.”

When he succeeded to presidency after Harding’s untimely death, Silent Cal did his part to make America great by doing little.  He told the republic to “Keep Cool with Coolidge.”  The populace rewarded him with victory in the 1924 presidential election.

Silent Cal, like the current president, reduced taxes.  However, he also did something quite uncommon.  He simultaneously reduced spending…and he did so by uttering one single word: “No.”

He said no to Veterans appeals for bonus payments.  He vetoed the Soldiers’ Bonus Act.  He said no to farmers.  He vetoed the McNary-Haugen Farm Relief Bill, which proposed government intervention into food markets to artificially inflate agriculture prices.  In total, he vetoed 50 pieces of legislation during his presidency.

On the uncommon occasion where Silent Cal opened his mouth, like when addressing the topic of The Press Under a Free Government, it was to clarify that:

“After all, the chief business of the American people is business.  They are profoundly concerned with producing, buying, selling, investing and prospering in the world.  I am strongly of opinion that the great majority of people will always find these are moving impulses of our life. […].  Wealth is the product of industry, ambition, character and untiring effort.  In all experience, the accumulation of wealth means the multiplication of schools, the increase of knowledge, the dissemination of intelligence, the encouragement of science, the broadening of outlook, the expansion of liberties, the widening of culture.”

An Honest and Easy Solution to Wealth Inequality

Naturally, Silent Cal didn’t have much tolerance for government intervention into schools, healthcare, agriculture, industry, toothpaste producers, or any other segment of the economy.  He was also opposed to policies of taxation and forced philanthropy.  He recognized that government doesn’t create wealth.

Were Coolidge alive today, would he discern that the source of the current massive wealth inequality is the Fed’s fake money?

He most likely would.  Because he’d already witnessed the wealth disparity blowout resulting from New York Federal Reserve Bank Governor Benjamin Strong’s “coup de whiskey to the stock market,” which occurred while Coolidge was President during the roaring 20s.

Certainly, Coolidge would disparage today’s system of central bank generated credit creation, and the great wealth disparities that it inflicts.  Moreover, his solution to the wealth gap wouldn’t be to tax the rich so that Washington could redistribute the spoils back to crony insiders, while handing out small crumbs for the masses.

Instead, to address today’s vast wealth inequality we think Silent Cal would find a far different approach to be far more agreeable.  Bill Bonner, writing in his daily diary, recently offered an apt alternative to big government taxation and redistribution:

‘“Inequality’ could be solved easily and honestly.

“Stop rigging interest rates.  The free market can decide what rates should be.  Most likely, it would discover rates that were much higher – probably over 5 percent.  Then, in a flash, like champagne at Hiroshima, the post-2009 gains of the super-wealthy would evaporate.

“So far, neither AOC [Alexandria Ocasio-Cortez] or DJT [Donald John Trump] has suggested such an elegant repair.  And don’t hold your breath.”

To this we’ll add one very specific and uncompromising provision: There will be absolutely, unconditionally, categorically, no government funded bailouts.


MN Gordon
for Economic Prism

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