The Only Problem: Bad Government

Abandoning their fetish for 9 per cent growth, India’s central bank has now honed in on inflation control.

Why is there inflation in the first place? Because the central bank had increased the supply of money and credit. With too much money chasing too few goods, inflation is bound to occur – and so the very same corrupt institution that created inflation is being given the task of controlling inflation!

This can never work.

As long as there is a central bank, and some bullcrap called “monetary policy,” booms and busts will forever continue.

Lessons can be learnt from the US, now facing a recession/depression for precisely the same reason: the loose and cheap money policies of the US Federal Reserve.

Karen DeCoster, writing on the Lew Rockwell blog, describes the pathetic scene in southern Michigan:

“Here in Southeastern Michigan, we got a head start on y'all in terms of the Depression. Things look especially bleak here. There are empty strip malls everywhere, especially in the medium-to-nicer suburbs. There are unfinished strip malls all around where I live. There are half-finished condo and townhouse projects, with the finished phases being 50% - 80% empty, and the rest of the property in 4-foot weeds. There are prime pieces of property on the semi-rural, north end of the suburbs that are cleared for development, with the home models sitting empty, and nothing but acres and acres of weeds filling the land.
So many niche businesses have closed - scrapbooking stores, mom-and-pop pet stores and grooming businesses, car detailing/accessory shops, small clothing stores, gift shoppes, florists, sports memorabilia shops, small gyms, etc. There are more empty gas stations and auto service centers than I have ever seen before. Nice - but newer - restaurants and taverns that opened at the height of the boom are mostly gone. Only the neighborhood staples and successful chains are going to remain. The super-duper auto dealers - who built massive castles on huge plots of land – are starting to fall.”

The same fate will befall India too, when the RBI’s credit squeeze kicks in. Businesses that were viable under a low interest regime will now prove to be loss-making, and they will fold. Consumer purchases fuelled by low interest rates will drop off.

If governments are the cause of boom-and-bust sequences, the only solution that faces ordinary people is to get their own businesses going. The US could recover if immigration is freed up, and anyone from anywhere who buys a house in the US is given a green card. The US will also recover if world trade is freed up – so that overseas markets for its produce are created and sustained.

In India too, getting out of the recession that is looming ahead requires freeing of businesses – including a freeing up of international trade. Total and absolute economic freedom in India is the best medicine for this country – and the ripple effects of this will positively impact the entire globe.

Thus, Kamal Nut’s intransigence at the WTO talks, which was the prime cause behind their breakdown, goes against the national interest. It also hurts the entire world. It depresses the global catallaxy and retards the international division of labour.

The idea that K Nut is a “representative” of India’s interests is false. He is a protectionist fighting for certain particular interests – the rest of the country, and the rest of humanity, be damned.

In many a way K Nut is like ramadoss (our health dictator) who recently spoke at an international conference, arguing for alcohol and tobacco bans, claiming to be “the voice of the sentiments of 1/6th of humanity living in the world's largest democracy.”

(His political party is the hitherto unknown PMK, allied with the DMK, which is how he became a minister in the coalition. Does anyone outside Tamil Nadu know what PMK stands for?)

This is the Big Lie: the idea of “representation.”

Neither the US Fed, nor the RBI, nor K Nut, nor ramadoss “represent” anyone but their own selfish interests. If we see through this deception, we will find the solution: Freeing all economic activity from all governments – including the production and supply of money, liberty to trade with foreigners, and freedom in domestic businesses as well.

Laissez faire is the ONLY WAY.