- Crisis intervention as policy = bad decision-making
- Why politics will defer dealing with the big problems, even though that will make them even bigger
- Why more taxes are in your future
- The criticality of increasing our alternatives — without our agitation, the government will appropriate from us while claiming "there's no other option"
If you have not yet read Part 1: Things Are Unraveling At An Accelerating Rate available free to all readers, please click here to read it first.
In Part 1, we examined how the dynamic of lowering interest rates to boost debt-based consumption inevitably leads to debt saturation and lower consumption. It also generates instability and rising systemic risks. As the returns on the central bank tricks of lowering interest rates and encouraging borrowing diminish, the resulting unraveling is speeding up.
There is another core dynamic at work: TINA, there is no alternative.
When There Is No Choice, Bad Policies Abound
In this week’s podcast with Chris (What To Expect From The Fourth Turning We're Now In), guest Neil Howe noted that crisis intervention is the result of authorities “feeling they had no other choice,” a.k.a. TINA. In this frame of mind, the eventual consequences of crisis intervention policies are ignored in the pressing desperation to make the financial and political pain of crisis go away.
As policymakers around the world soon discovered, TINA policies are habit-forming. Since they had no choice but to bail out the parasitic, dysfunctional banking sector, and goose debt-based consumption with cash for clunkers, mass purchases of mortgages, etc., they also had no choice but to continue these interventions, lest the desired result—expanding consumption and a rising stock market—falter.
Substituting crisis intervention for long-term constructive policies leads to bad policies, for the simple reason that…