Greetings, fellow Fat Heads!
Well, I’m guessing Tom is mostly packed for the Low Carb Cruise and is using his last couple of days before departing to practice his speech/celebrity roast a couple of hundred more times.
Seriously. The man has a thing about being prepared. He’s actually been that way since we were kids; but his preparation for, and career as a standup comedian years ago really cemented it into his personality. I went to Chicago a couple of times back in the day when he was getting started to see him at “open mike” nights. He’d spent months preparing material, worked the door in a couple of clubs for awhile so he could get paid to observe and learn, and would always get to the open mikes early to see who else was in the lineup, check out the crowd, make sure he didn’t get stuck performing right after a damned folk singer, etc. (Nobody laughs right after ten minutes of hearing how we’re killing all the whales. Off key.).
Of course, he always did pretty good, but as fun as it was to watch him work, I had to stop going to them. There was invariably an excruciating five minutes or so starring someone you could tell must’ve been the “comedian” of their social circle. The one people always tell “oh, you’re so funny – you should do standup!” So they’d assume all you had to do was stand up and be funny, and there they’d be at the open mike, completely unprepared, staring at a bunch of strangers, trying to “be funny.” Watching them suffer through it as their egos melted onstage gave ME flop sweats! You’re like “for the love of God and mercy, bring out the folk singer!” Anyway, the point is, if you want people to think you’re spontaneously funny in front of a crowd, it’s best to practice like hell.
The other point is, you’re officially stuck with me again for the next week or so.
Here’s something that’s been on my mind…
When I talk or blog about “real” food or great low carb eats – fresh eggs, raw milk, pastured meat, fish, dairy, fresh veggies, nuts etc. — there’s invariably a remark or two referring to the cost of eating this way. It sounds great, the thinking goes, but it “costs too much.” This is accurate in a relative sense, but also completely wrong.
Sure, you will likely spend more money if you’re shopping local and spending most of your time at the meat counter and produce aisles at the grocery instead in the central area of the store (i.e., the Carb Zone). So from a “what’s left in the bank” sense, it seems eating LCHF may “cost too much,” but in fact the real problem is that our whole low-fat, hyper-processed, modified, enriched, hearthealthywholegrain-based Standard American Diet (SAD) costs way too little.
It’s a real difference, and it’s important to understand it. Unfortunately, that means I’m going to talk about economics. I know Tom and I both have other blogs dedicated to our libertarian rantings, but this is integral to understanding your food and your health, and I think it’s important for you to consider. If you promise to try to stay awake, I’ll promise to try to make it interesting.
First, we need to digress to the Austrian Business Cycle. You likely haven’t heard of it.
That’s because any economist you read in the mainstream media is going to be a Keynesian economist, who are to economic reality what ADA nutritionists are to healthy eating. That is, they’re both intelligent, highly educated, credentialed shills for the big businesses and government agencies who employ them.
The Keynesian Theory of the Business Cycle then, which is probably the one you heard if you had a high school economics class, is that an economy can be humming along nicely — people buying lots of stuff, low unemployment, rising incomes — when some disconcerting event or circumstance (like a stock market crash) hurts the economy’s self esteem and it all inexplicably goes bad. So consumers stop buying things, so businesses start losing money, so businesses lay people off, so people buy even less and it all starts circling the drain. Everyone. At the exact same time. Stupid businesses. Stupid consumers. This is a recession, or depression, or bubble, or something bad.
The solution then, happily enough for the government and big business, is for the government to jump in and spend money, via government programs and bailouts, to fire things back up and jump-start another happy cycle.
Once our resident geniuses have everything running smoothly again, the Keynesian Theory says the government should then cut back on spending (to avoid inflation) and start saving money. Snork! Sorry — I can never seem to say that and keep a straight face.
To summaraize, the Keynesian view of the role of government is to spur the “animal spirits” of a down economy with high unemployment with spending (gas) and temper the irrational exuberance and potential inflation of a “hot” economy with savings and cutbacks (brakes). It has no explanation for things like “stagflation” as we’re seeing now — high unemployment and rising prices.
The Austrian School, on the other hand, says that the business cycle isn’t the result of “animal spirits” or “consumer confidence” killing off a booming good economy. It asks how could an economy be ostensibly zooming along (boom), when suddenly every business in the country (or world, in the present case) become stupid and all make the exact wrong decision and make too much stuff (houses, car plants, etc) at the exact same time people stop buying stuff (bust)? The Austrian answer is that the only way you can get everyone to make the same wrong decision at the same time is if they all get the exact same wrong information at the same time to make that decision with. And the only way everyone can have the same wrong information at the same time is if the government gives that information to them.
Information like if we told millions of people this, for example:
“To help the economy, we’ll make money so cheap (via low interest rates) and risk free (via government mortgage guarantees), you can buy a $500,000 house with nothing down even though you’re only making $30,000 a year and have $60,000 in credit card debt and a car loan. If you don’t have a car loan, take out a second mortgage and buy one. After all, house prices always go up!”
So millions of people who shouldn’t even buy a $150,000 house go out and “buy” (they’ll never really pay for it) a $500,000 house.
So thousands of builders build millions of homes that aren’t going to be paid for. And hire tens of thousands of construction workers to build homes no one can really afford. Who buy thousands of pickup trucks that they really can’t afford because they’re going to lose their jobs when people stop making their loan payments and banks stop making loans to people who can’t afford them so builders stop building, because now there’s millions of houses built that can’t be sold.
Here’s another kind of bad information:
If you spend $30,000 on solar panels, we’ll give you a $10,000 tax credit.
Same effect, different flavor.
You’re telling a solar panel manufacturer, for instance, that it’s a good idea to hire people and buy materials and invest in equipment if they can do that for a total value of expended assets of, say, $25,000. This appears to be a good decision because by expending $25,000 they receive $30,0000, meaning they’ve created a surplus (profit) of $5,000 of value – a 20% return.
But they’ve really only created $20,000 of value, so they’re really — on net — destroying $5,000 of resources every time they manufacture a new system.
(No, I don’t mean Solyndra — they knew and they’re crooks.)
And so on.
Everyone meant well enough. They just all had bad information. When they heard they could afford the mortgage, or heard someone ask to build them a new home, or heard someone ask them to be a roofer or concrete worker or electrician, or heard someone say they wanted to buy a new truck, or buy equipment for a new truck plant, or make a solar panel, they thought “the market” was telling them people had more money and wanted to buy more stuff, so they built factories and hired people.
But the market wasn’t telling them that. It was the government. The problem is, when that builder is sitting down with that expectant homeowner, or the construction worker is sitting the truck dealer’s office, or the auto manufacturer is talking with the bumper vendor, or the solar panel maker is hiring people, they have no way of knowing whether it’s the market or the government doing the talking, because they both use the same language – the dollar. And that dollar isn’t saying if it came from someone creating value and saving it to spend or invest for other value in return, or if it just came off of a printing press.
Bad information. Bad information always creates an incentive to misdirect and waste assets.
Once this builds up to the point that it can no longer be sustained with more taxing, borrowing, or printing, here comes the “bust.” But understand that it’s really the “boom” that is the disease — the inefficient companies, the factories built to produce goods people can’t really afford, etc. The “bust” is the cure. It’s the only solution that will actually put things right. Via crashed house prices, jobs dislocated, factories closed, all kinds of painful things the government is intent on postponing or trying to shift to others to pay. You can’t heal until the toxins are purged.
Still awake? You’re a trooper. We’ll get back to our grocery bill, and my basic premise, on Monday in Part II.
Have a great weekend — see you in the comments.
The Older Brother
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