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The economy. Us here at Truthloader will be the first ones to admit that we have quite
a bit of trouble understanding it. But if we've learnt anything in recent years, it's
that politicians quite like it that way. Because if us, the little people, you know, the ones
who vote, really understood what was going on then we probably wouldn't like it all that
much. Well, we decided to it was time to try and
shine some light on what it is that politicians are keeping from us.
So we've teamed up with Renegade Economist, a band of self-described "renegade thinkers"
who challenge what they say is the misinformation being supplied by our political and financial
institutions. They are also the people behind the award-winning documentary Four Horsemen,
which you can watch for free on their YouTube channel, Renegade Economist. A link to this
should be appearing on the screen right... now. You can also find a link to the Renegade
Economist website in the description below. To put it mildly, these guys know a lot more
about the economy than us. So sit back, maybe get yourselves a cuppa, and prepare to be
shocked, as they let us in on what the politicians have been keeping from us about the economy.
.. One of the things that politicians won't tell
you about the economy is that bankers are not actually wealth creators. Bankers are
wealth destroyers, and this is how it happens. Bankers are allowed to create money out of
thin air and lend it at interest. When they do this they put pressure on what we call
the real economy. So what we have to differentiate is money and wealth. Money can be created
out of thin air and lent at interest. Wealth can't be. Wealth has to be defined as products,
services and experiences that value creators i.e. the people who work in the real economy,
create. And basically that's how our system works. Without value creators there can be
no value extractors. Bankers are actually value extractors. So how do they do it? Well
by creating money out of thin air and lending at interest, what happens is more money enters
the system which pushes the price of experiences, services and products up, thus making it harder
for people who are value creators in the real economy, to function. So as opposed to bankers
being wealth creators, actually bankers are wealth destroyers.
So the other thing that politicians will not tell you about the economy is that high house
prices are actually bad for the real economy. The reason? Well governments don't get elected
if house prices are going down. So why are they bad? Well when we look at consumables
and commodities and products that we use everyday and we see that the cost of living is going
up, we say collectively "Well this is a bad thing," but why is it different when we look
at housing? Well one of the reasons is because we use housing as an investment vehicle, and
this is disastrous because what it does is it sucks capital out of the economy and puts
it into an unproductive asset. So, when politicians say "Don't worry, house prices are going up,"
what we should all do is worry because actually house prices going up means that we have a
bigger squeeze on the rest of the economy. So the thing that they won't tell you is that
house prices going up is actually bad for, generally for everybody, but it does benefit
minorities of people: the fire sector, financial, insurance and real estate businesses, they
of course benefit. Certain people who have the cash to buy houses and see the uplift
in value - of course it benefits them. So politicians pander to these groups to try
and win votes at election time but it's counter-intuitive and ultimately it sets us on the wrong path.
Neo-classical economics are bad for people AND planet
Another thing politicians won't tell you about the economy is that the current economic paradigm
that we live under, namely neo-classical economics, is not actually good for people or planet,
and this is the reason. Firstly, neo-classical economists when they start to model the economy,
they don't factor in three things, and this is why their models are so totally and utterly
useless when it comes to modelling, or predicting what's going to happen in the economy. The
three things when they're analysing capitalism that they don't include is banks, debt and
money. If you leave banks, debt and money out of your models when you're trying to analyse
capitalism there is absolutely no way that you can do it with any certainty whatsoever.
It's like going to a doctor and saying, "Look, I know there's something wrong with me but
can you not have a look at my brain, lungs and heart because I don't think actually they're
relevant," of course banks, debt and money are massively relevant to the capitalist economy.
And as long as neo-classical economists leave banks, debt and money out of their models
there is absolutely no way that they can analyse capitalism, or judge what's going to happen
in the real economy with any certainty. But it gets worse. Because it isn't just bad for
people not understanding how capitalism works, it's also bad for planet. And one of the reasons
why we see so much ecological destruction and environmental degradation now is because
neo-classical economists leave out a very vital piece of information when it comes to
what we call "factors of production". There are three factors of production: land, labour
and capital. And the neo-classical economist never factors land into his or her models.
So, we, as a race, or as a species, are incentivised to destroy the planet because we never see
land, and when I say "land" I'm talking broadly about all natural resources, as a unique factor
of production. If you're eliminating, or if you've got a selective amnesia about these
things, of course a) you're not going to be able to model the economy, and b) you're going
to push it to booms, busts and environmental disasters, on a regular basis, because you've
only got about a third of the information. The other thing that politicians won't tell
you about the economy is that actually it's divided into two very distinct groups. One
group is the predatory group which chase value; the other group is actually the value-creating
group which look to create products, services and experiences in the real economy that adds
to everybody's life. So, how does it work? Well the predators go and look for value,
whilst the producers create value in the real economy. Let's take, for instance, the NHS.
That's a value-creating organisation, it gets people better, it creates experiences, and
it creates products that enhance people's lives, in fact saves people's lives. One of
the reasons that the NHS is under so much fire at the moment is because the financial
sector understands that if it can get into the NHS, a value-creating business, and start
charging heavily for those services, that it will make a lot more money. What happens
when it does start charging heavily for that services? Well, inefficiency, real inefficiency,
and although they dub it as inefficient at the moment, when a financier, a predatory
financial organisation gets its teeth into these services, quality generally goes down
over time. So what needs to be protected? Well, obviously value-creating businesses
have to be protected. Why? Well, without value-creating businesses there couldn't be a financial sector,
so logically, if they continue buying value-creating businesses and taking the value out of them
and privatising that value we are all much worse off. So that's the divide: Producer
and predator. And unless the predators are monitored, regulated and watched very carefully,
what we have is a free-for-all, and ultimately huge monopoly.
The other thing that politicians won't tell you about the economy is actually we live
in a rentier society. Now, what does that mean. Well, we live in a society that is fundamentally
driven by what's called "rent-seeking". Rent-seeking is apportioning wealth that is created by
others. And there's many ways that you can do this. But one of the chief ways that you
can do it is to lobby politicians so they change rules within the statute books which
allows businesses to get an unfair advantage over other businesses and monopolise markets.
So, how does this happen? Very simple. A lobbyist will speak to the government and suggest reasons
why they should change rules that are favourable, say, to the financial sector, and then when
they've changed those rules, the financial sector can then go out and sell products around
that rule change and take profit out of the system for doing so. This is a source of huge
wealth inequality because the more that you skew the playing field towards the financial
sector, the more and more inequality goes up as wages in that sector inflate hugely,
whilst wages in the real economy goes down. So, when we live under the duress of rent-seeking,
everybody in the real economy actually gets poorer. But politicians won't use the word
"rent-seeking" because they say the electorate won't understand it. Well, the electorate
understand very well that when corporate power lobbies government to keep other players out
of the market, that inequality is a natural byproduct of that. What we have to do is really
focus on the rent-seeking paradigm and have our elected leaders understand that the electorate
knows that that means. Until we put pressure on our elected leaders, these professional
politicians won't change anything. So there you have it, the five things politicians
will never tell us about the economy. As always, you can let us know your thoughts in the comments
below. Til next time!