Where's the Supply?

December 27. 2008

If you recall, the promise of the trickle-down economics that has brought our economy to its knees was to add supply (so called, supply-side economics).

Instead of adding supply, the capital amassed was arbitraged to finance a leverage that exceeded 100/1 in some cases, and a false fundamental shortage was organized and executed to both inflate prices and deflate the economy, effectively, deliberately, short selling the entire economy.

The aggregate effect is to deliberately engineer payment of the leverage (the macro economic rent) at the highest possible rate through a complex routine of seemingly inchoate political-economic events. While it all looks disconnected, it all acts to pay maximum leverage at the lowest possible cost until the tax liability increases the cost.

Back when Bush was selected chief executive he declared, along with a Republican congress, that a regressive tax code would yield a supply-side benefit. It instead yielded a demand-side management, command, of the economy--a maldistribution of income that gives the power to command markets into a supply-side deficiency, causing stagflation, deflation and unemployment, as I said it would at the time.

Inflation has been controlled--commanded--by deflationary means (by reducing demand), not disinflationary means (by increasing supply).

A disinflationary (supply-side) means not only adds supply of goods and services but the number of firms available to produce it so that there can be full employment with low inflation due to the adequate supply. It also relieves dependance on just a few firms organized to be "too big to fail" which, as we have seen very well, does not produce an economics that resembles a free-market economy, but a result that can only be described as command economy--an elitist, not a pluralist, model of power and political economy.

Instead of The People deciding who is best to survive through pluralistic means of a free market, the worst survive the crisis they create, by virtue of their bigness, and consolidate even more. The worst survive and accumulate even more power by elite decisional process, deciding with techno-bureaucratic expertise who should survive to prevent the crisis they cause, and it will philosophically suffice to call this the inevitable "will to power" of our natural elite.

Pure and simple, the supply-side argument of the neo-conservative coalition was a lie. It has been very clearly disconfirmed by the evidence in the very biggest way once again!

Command control of the economy is the fully organized intent of the neo-conservative coalition now operating with political-economic complexity in the hope that We The People will not condemn their ideology to the dustbin of failed economic policies and programs empirically tested to a fare-thee-well.

The rhetoric now being proferred by neo-conservatives is the fear We The People should have of the alternative "ism" with its alternative set of beliefs and organized means of validation over verification--a self-similarity of organized means to ends that re-iterates the elitist model of power and political economy. Where a pluralistic process of verifiable accountability and legitimacy is needed, an elitist process will be iterated as a progressive, historical extension, and validation, of itself.

The method of neo-conservatives to determine "truth" is mostly an ideology of beliefs that are based on lies. They proclaim that they organize a free-market economy, for example, that they have done well to entirely discredit. The People should now fear the alternative ideology, effectively defining a re-iteration of the model as the alternative.

The non-iterative alternative is not ideological.

The People voted for freedom and democracy that comes with organizing for a real and verifiable free-market economy that not only provides plenty, supply, but that supply affords real and immediate, direct accountability that is not a function of ideology but of a pragmatic empiricism in which the truth has no ideological dependance and provides us with what we can all legitimately believe in despite all our differences.

If the captains of industry cannot, will not, subordinate to the rigors of a free and unconsolidated marketplace, out of greed, out of avarice, squandering what they have and coveting what they have not, organizing to deprive under the guise to provide, then We are not dependant on them as long as We ensure an organized free-market economics in priority. Someone else is always waiting to replace them and subordinate their greed, or the will to power, to the complete satisfaction of the consumer--the free marketplace that is The Will of the People and the legitimate profit that is its measure.

When the profit is not sufficiently reinvested to add supply but to deprive it on the demand side (the engrossment of capital, or the illiquidity we have now), the profit is then less a measure of preference than the power to determine the choice. The profit then becomes a measure of power and not of preference.

To correct for the distorted measure of the profit--the source and meaning of power it is supposed to empirically measure, instead of The People being subordinated to conservative ideology and the elite model with a bail out, the captains of organized micro means are subordinated to the clear and decisive macro means of a verifiable legitimacy that a free and unconsolidated marketplace provides and the "will to power" cannot avoid.

The "will to power" organizes to avoid being denied access to the marketplace rather than denying it. The only declarative knowledge is verification of a pluralistic process when the economy is freely participated independent of any "ism" declared to be absolute truth or knowledge. Adding supply is not dependant on belief, but maximum participation that leads to maximum innovation and productive efficiency dictated by the profitable demands of a free and unconsolidated marketplace.