Spoiler Alert: Santa, Tooth Fairy, And Keynesianism Are Imaginary Friends

Tyler Durden's picture

Sean Corrigan, of Diapason Commodities Management, outdoes himself this week. At one fell swoop, and in his usual eloquent manner, he dismantles Krugman's Keynesian war-mongering, Bernanke's bafflement at a lack of recovery, Trichet's stable instability, and Hildebrand's god-like control of markets. Quite a read for a Sunday afternoon.

On Krugman:

Spare a thought for the ineffable Paul Krugman who was musing only the other week that what America needed was, if not quite a war, then certainly a good, old-fashioned war scare, to dissolve the few remaining constraints to unsound finance and ruinous inflationism.

On Bernanke:

Though it has elicited a great deal of last-ditch optimism among the Polyannas and Panglosses that it will soon usher in an asset?boosting surge of intervention, the Chairman’s two most recent takes upon the economic outlook struck this observer as being a great deal less arrogant and cocksure than were his offerings the same time last year when he launched his ill?advised second programme of quantitative easing.

On Trichet:

Mais, oui, M’sieur Trichet! You may have delivered price stability by your own narrow lights, but yours has ultimately been the stability of a coma patient, hooked up to a ventilator and a heart monitor in the ICU of the local hospital. Indeed, in the case of the browbeaten Irish, it seems that you are even the one who inflicted their injury.

On Hildebrand:

Did no-one stop to think that a little re-adjustment might be useful in a land where a Big Mac cost—at the franc’s brief peak—125% more than it did in its home territory, or where—even in the least pretentious establishments—beer was selling for at least double the UK price?

And while the 'unpalatable good sense' of Andrew Mellon's 1930s liquidate-it-all speech may be an extreme response, Sean's description of the current meme seems just as incredulous to many:

‘…liquefy labour, liquefy stocks, liquefy farmers, liquefy real estate…when people get an inflationary brainstorm, the only way to get it off their books is to prevent its collapse… to preserve the rottenness in the system. High costs of living and high living must not be allowed to come down. People will have to spend harder and hang the moral life. Values will be arbitrarily adjusted from on high lest enterprising people pick up from less competent people…’


Talbot's Last Lament

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CaptFufflePants's picture

As well as the fairy tale that tax cuts create jobs:


See 1950's to 1970's with tax rates abover 70%


People were employed, the economy was vibrant, then the tax cutting cult came into Washington DC and it's been down hill ever since.

CapitalistRock's picture

Listen moron, you don't create jobs by raping the job creators.

JW n FL's picture



God Bless the Job Creators!!

Wall Street collects 10 times more Tax Money than the U.S. Military!

Wall Street is sitting on $11 to $30+ Trillion fucking dollars and has been for the last (almost) 2 years!

one day they will bring back the 11 Million Manufacturing jobs they sent to china!

one day that tax base will be back!

"We the People" just need some Austerity! to help Wall Street out a little..

Corporations dont pay Taxes it is just a pass thru expense to the consumer..

the real problem is all those free loaders on welfare!

all those Mexicans paying into the system that are unable to use it..

thats the real problem..

it is NOT the Job Creators who suck up 10 times more money than the military! it cant be them, they are the job creators.. who lobbied Washington for tax breaks to send 11 million jobs to china! it can be them!

go back to huffington post and finger paint with your own shit, you fucking retarded child.

flacon's picture

In French, "Trichet" means "Cheater". 

mccoyspace's picture

Warning: grammar nazism to follow--

'Trichet' does not mean 'cheater'. 'Tricheur' is the French word for cheater. His name is closest to the infinitive form of 'to cheat', but even then, not exactly. 'Tricher' is the infinitive in French. Finally, there is also 'triche' or 'la triche' which mean cheating, but no exactly the same as his name.

When the name is spoken, something like "Trish-ay", it sounds like the infinitive form of the verb 'tricher' is prononced essentially the same "Trish-ay". So we are close in that case.


/grammar nazi off



I did it by Occident's picture

As most European surnames are from the middle ages, trichet is probably an old spelling of tricheur or related word.  So probably still means cheat in middle French. 

OldPhart's picture

Wall Street are the parasites of our economy, along with lawyers and politicians.

The real job creators are the mom and pop companies throughout the US. 

I would have NO problem with a tax policy that focused on Wall Street, Banks, Financial Firms, and Mega-Corps with a goal of total destruction built in.  These behemoths have to fall for our politics to become cleaner in any sort of way and for our economy to have any hope of thriving.

Politicians and 'finger-pointers' paint with too broad a brush, creating compounding 'unforeseen circumstances' that devastate the roots of our recovery...Main Street.

duo's picture

Right.  Every public corporation should have 100+ executives on the stock-option gravy train consuming a billion or more each year of cash flow (buybacks), cash that could have been spent on health insurance or pay for the average worker.

Zero Govt's picture

Can the 7 idiot retards that voted down CapitalistRocks' comment go stick their heads in a gas oven.. Thanks, you're doing the human race and yourselves a favour with self de-selection

JW n FL's picture




Natalie Merchant ? Which side are you on? | (Lyrics) HD • bytera


"Which Side Are You On?" is a song written by Florence Reece in 1931. She was the wife of a union organizer for the United Mine Workers in Harlan County, Kentucky. In 1931, the miners of that region were locked in a bitter and violent struggle with the mine owners. In an attempt to intimidate the Reece family, deputies hired by the mining company illegally entered and searched the Reece family home. Sam Reece had been warned in advance and escaped, but Florence and their children were terrorized in his place. That night, after the men had gone, Florence wrote the lyrics to "Which Side Are You On?" on a calendar that hung in the kitchen of her home. She took the melody from a traditional Baptist hymn, "Lay the Lily Low", or the traditional ballad "Jack Munro". Florence recorded the song and it can be heard on the CD Coal Mining Women.

Reece supported a second wave of miner strikes circa 1973, as recounted in the documentary Harlan County USA. She and others perform "Which Side Are You On?" a number of times throughout.

The song is referred to by Bob Dylan in the song "Desolation Row".

Source: wikipedia http://bit.ly/kWWIfS

Esso's picture

FWIW, that doesn't work out so good with natural gas. In the old days they used what was called town gas, a manufactured gas in which the primary component was carbon monoxide (CO is flammable).

You can die from oxygen deprivation from NatGas, but you better plan on being at it for quite a long time.

LawsofPhysics's picture

GOP talking points, got any FACTS?  Just what job creators are you talking about.  Bush tax cuts in place for over 8 years, where are the jobs?

traditionalfunds's picture

I'll take a shot at this.

You see it is because there has been "uncertainty" about the Bush tax cuts.

What we need are some "certain" tax cuts that will last until eternity. Then the "job creators" will have what they have been waiting for to get our economy going again. God Bless the Job Creators.

Plausible? Thought so.

Now back to our regularly scheduled talking points.





Clearly_Irrational's picture

Fair enough, how about we require proof on the tax form of how many jobs you created that year in order to avoid the new tax?

ursus.peracto's picture

She it

Let Uncle Sugar tax income at a 100% rate then.


We could all make solar panels for President Zero.

ElTerco's picture

If we increase the marginal tax rate to 100% (it was over 90% in the late 40's and early 50's), then maybe just maybe , the effective tax rate will rise to 25% for the people on wall street, making their tax rate just about 5% less than the current tax rate of a vast number of people in the middle class.

Peter K's picture

Dude? That's so 60's. Like 1860's. And we know how that ends. PS Not well.

Corn1945's picture

You first.

I'm going to be real motivated at work when my tax rate is 70%. Thankfully, we aren't going back to that.

LawsofPhysics's picture

The funny thing is that I seriouslt doubt that any people making over a million dollars a year (who will actually be taxed at 70%) are busy blogging.  Fucking morons, good fodder, but still morons.

gwar5's picture

Things went down hill after the House and Senate went socialist after the 2006 elections and doubled the national debt limit in 5 years ($8.2T -> $16.5T).


The Marxist bitter clingers can confiscate 100% of millionaires income, making Obama's necronomy worse, and it will not make a dent in their annual $1.5 Trillion yearly deficits. But since they never bothered to do a budget for the last 3 years, they really might not be aware how bad they've made things. They have been too shameful and fraudulent to do the last 3 years budgets, which would have made them public for everyone to see -- as was required by law. 










Miles Kendig's picture

Deficits don't matter - Dick Cheney

Push back your socialist time piece pal

Missiondweller's picture

Yes true when the long term growth rate is 3% and your deficits are 3%.


Now compare that to Obama's economy 0-1% growth and 11% deficits

Xavier Doe's picture

But, as Peter Schiff points out, nobody *paid* those taxes.  70% was ostensibly the amount paid *after* all deductions, exemptions, non-reporting, etc. were taken into account; but in those days, an ordinary high income earner could find ways to structure his/her tax return so that the effective tax rate -- the actual % of tax paid -- was well *under* what they pay today.  It's creeping toward 50%; it was *never close* to 50% back in the 1950's - 1970's.

So: *effective* tax rates have actually gone *up*.  Thus the griping, the visible effects on reinvestment in the economy, and so on.

I'm just talking about the productive class... the financial class is a different story.

Chuck Walla's picture

^^ Another Media Maters flying monkey.  This claptrap is some kind of rebuttal to help Owe-bama get elected.

FreedomGuy's picture

You can't really believe that. Most the people who quote that BS don't believe it. If you REALLY believe it then you should push for 100% tax rates. If 70% was great, then 100% must finally be the leftist utopia!

Rates don't mean much. What counts is actual taxes paid and where the rates rise. You can have a 90% rate but if it doesn't kick in till the third billion and it comes with loads of loopholes, then it doesn't matter much. I remember the early 80's when credit card and all interest was deductible. Social Security collections were lower, too.

The historical maximum is a little over 19.2%. People push back after that. Government spending is now over 25% of GDP. That's your real tax rate.

What I really like is all the dumbass Che' Guevera wearing lefties, the Michael Moore's, Harry Belafonte's, etc. They all spout leftist bullshit but not a one of them ever moves to a leftist country. Not one!

GeneMarchbanks's picture

Liquefy Andrews Mellon.

lieutenantjohnchard's picture

captainfufflepants, which one are you: the tooth fairy, santa or keynesianfraudmeister?

navy62802's picture

Values will be arbitrarily adjusted from on high lest enterprising people pick up from less competent people…

I couldn't have encapsulated the central concept of capitalism better myself.

Tuffmug's picture

Solid ideas Sean, but reading your prose is a struggle. You need a writing coach.

hackettlad's picture

Indeed, the prose is verbose, pleonastic and inelegant.  

ghostcommander's picture

Keynesian economics worked very well for American from FDR' New Deal up until Reagan became President and started dismantling what had worked for many decades.
Income inequality is where it was in 1928. We are in the 21st century but our tax income is back to where it was in 1928.

America had it's highest GDP growh rates when marginal tax rates were 90% and then 70%, union membership was at it.s peak, and incomes for all groups, from top to bottom, were increasing.
During those yars we started and finished the Interstate highway system, built a fabulous space program, instituted Medicare, improved the defense capabilities, and many other beneficial feats.

Comparing GDP growh rates from 1948-2005  under Democratic and Republican Presidents, you will find that under the Democrats the GDP increased an average of 2.41%, under the republicans the GDP average increase was only 1.13%.

Republicans have told us over and over that they are fiwscally responsible with taxpayer dollars, but that is not true. Just click on: www.lafn.org/gvdc/Natl_Debt_Chart.html.

Under the bush/cheney miserable failure administration, the narrrow minded ideology of totally unregulated capitalism was embraced with zeal.

The" Housing Fraud Bubble" grew and burst creating the "almost financial market collapse and the Great Recession started.
The after effects of the almost financial marketr collapse:
The loss of $34,000,000,000,000 of America's wealth that took 232 years to create and will take many decades to recover.
The loss of millions of home to foreclosure, millions more facing foreclosure, and millions of home owners "underwater in their homes.
The average loss of $100,000 in home owner's equity.

The loss of millions and millions of jobs that will take over a decade to recover.

The loss of over 400,000 families to poverty.

The radical extremists that wear the republican label are co-culprits in the economic disaster we are in, but will not admit it, nor will they co-operate to fix their problem. They are telling liesw, even preposterous lies, and repeating them over to cover it all up, and to blame President Obama and the Democrats.

Since 01-20-2009, they have obstructede every stimulus attempt, every attempt to create jobs, and even voted against unemployment benefit extensions for the long term unemployed, because of what the irresponsible republicans have done.

Their obstruction and extortion is aimed at President Obam and the victims are the American people that are being held hostage so they can blame and smite President Obama and the Democrats.

For a political party to be legitimate, they must have positive political accomplishments.

Please let 'We the People" know what  positive political accomplishments the radical extremist fake republicans have.


drbill's picture

"Keynesian economics worked very well for American from FDR' New Deal up until Reagan became President and started dismantling what had worked for many decades."

Is this guy serious?

BigJim's picture

Is this guy serious?

Probably. There are a lot of non-idiots who are completely idiotic when it comes to economics. But it's not their fault - most of them received an Ivy-League education. What chance have they got of allowing themselves to see through Establishment bullshit? That would mean admitting *gasp* they wasted a LOT of money on university fees...

malikai's picture

-1 For lame trolling. Take lessons from MillionDollarBonus.

flacon's picture

Keynesianism always "works" when you start off with massive surplusses - that's because spending feels good. But when all the surplusses are GONE... not to fear, we will just spend that which we haven't earned yet. 


Here is the catch22 that the central banks are advocating: "We have too much debt. So we need more debt to fund more growth to pay down the debt". How is that working out?

Miles Kendig's picture

The "positive accomplishments" you speak of seem to be rooted from a place within using.  May i suggest you try a sober stint first and take a fresh look from the outside.  This is neither a R or D issue, but a free money harvest from the money tree vs hard earned money from ones own labor issue.  There is no such thing as a free lunch, a free buzz or free transfer of wealth to make either proposition a sustainable reality


Central Bankster's picture

Edit - never mind, wasting my time.

Dasa Slooofoot's picture

Since 01-20-2009, they have obstructede every stimulus attempt, every attempt to create jobs, and even voted against unemployment benefit extensions for the long term unemployed, because of what the irresponsible republicans have done.

 What is it about a "super-majority" that you don't understand, you stupid shitloaf? 

BigJim's picture


Comparing GDP growh rates from 1948-2005  under Democratic and Republican Presidents, you will find that under the Democrats the GDP increased an average of 2.41%, under the republicans the GDP average increase was only 1.13%.

And what, my learned friend, is GDP? Is it a reliable number that tells us of how much wealth is (or isn't) being created? If, for instance, the government borrowed $3T and spent the money digging holes and filling them up again, do you think this would have a positive effect on GDP? Do you think the creation and uncreation of all those holes would make us all wealthier?

And... if the government distorts how much 'inflation' there is... and we have good reason to believe it does... do you think that will influence the GDP calculation?

What if interest rates are held very low and the economy 'booms' as vast quantities of fiat are created via fractional reserve lending, and people spend the money bidding up non-productive assets... do you think that will have a positive effect on GDP? But are people getting any more wealthy?

Some homework for you, Ghostcommander: why do you think it is that people who have some understanding of monetary theory, tend not to be partisan in their analysis of the End of the American Empire?

Ghordius's picture

GDP can be useful to show how much of what has been produced last year is being consumed or reinvested. Krugman is of course for consumption, even if it's the Government's consumption of ammunition...

ElvisDog's picture

Ghostcommander, are you paid by the word? Just wondering. You're quite a verbose little troll. Unfortunately, the readers of ZH are, by and large, not mindless sheeple and don't play your pathetic little red-blue blame game.

FreedomGuy's picture

See my earlier post. So, the whole damn world is doing Keynesian stimulus and currency manipulations. How is that working? Keynesian priming of the housing market and interest rates got us here.

The only thing you really said that was true was that Republicans are not fiscally responsible. That is generally true. The two options are cut government or raise taxes to balance the books. Dems won't cut government and Republicans generally won't raise taxes. The difference is the annual deficit and the national debt...plus the unfunded liabilities. It is the difference between what we want from government and what we are willing to actually pay.

The commies did 100% taxation and control. Why didn't that work?

Miles Kendig's picture

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain -- and since labor is pain in itself -- it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor.

It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder.

But, generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws.

This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds.

- Frederick Bastiat

Sean, it time for the Raiders to smoke the Buccaneers

BigJim's picture

Bastiat. What a genius the man was. If only Crudman would take the time to pick up one of his books and read it... think of the all the drivel we would be spared.

Miles Kendig's picture

When Paul Krugman actually has volunteered for and successfully led from the front rather than sip tea in the rear his relentless consumption of all available O2 may be worth enduring the endless CO2 he spews forth


FreedomGuy's picture

Ahhh, Bastiat. It's economic scripture and good for the libertarian soul! Quote away, my friend!

Zero Govt's picture

"Paul Krugman was musing only the other week that what America needed was, if not quite a war, then certainly a good, old-fashioned war scare, to dissolve the few remaining constraints to unsound finance and ruinous inflationism."

What 3 (illegal) foreign wars not enough for Krugman??? Maybe a 4th illegal foreign occupation and murdering would really help Krugmans inflation fears Or maybe like every other centrist 'solution' Krugman dribbles on about it won't (work).

Why doesn't Krugman go fight the Taliban and report back from the frontline how his inflation strategy is bringing down the price of Obergines in New Hampshire???

Could this moron socialist possibly get his head any further up his rectum?

BigJim's picture

Krugman would LOVE to go fight the Taliban! But, sadly, he is needed here. Who else could write so persuasively that there really is such a thing as a free lunch, and its name is Deficit Spending?

benslawyer's picture

"to dissolve the few remaining constraints to unsound finance and ruinous inflationism."


Do you suspect there could be some sarcasm there?