In Search of Sin

By Glenn Stehle

When Stephanie Kelton spoke of orthodox economics and its “one size fits all perspective” in her recent lecture at the Fields Institute, it got me to thinking that when it comes to deficit hawks, they really know how to do sin right.   And like all good religious fundamentalists, proportionality never enters the picture.  One sin takes precedence over all others, others becoming unimportant in the ardor to root out the one true evil.

For the deficit hawks, the one true evil is inflation.  And since sin is everywhere, so is the hunt for inflation.  If Satan hasn’t already possessed you, he’s just around the corner stalking you:   that obsessive, unrelenting, conniving lowlife with fiendishly selfish malice and compulsion to control, plotting to gain unwanted access.  “Be self-controlled and alert,” the Bible tells us, “Your enemy the devil prowls around like a roaring lion looking for someone to devour.”

But here’s the rub:  this sort of thinking is not without negative consequences.  This is so because ever since the Great Depression and Keynes and FDR (well actually since Hitler and his economists) we’ve known from experience that the surest way to end a deflationary spiral and a depression is through government spending and deficits.  Conversely, we’ve known ever since WWII and Keynes and FDR that one of the most effective ways to contain an inflationary spiral is through increased taxes and lower deficits.  But the first of these policy options has been taken off the table.  Why?  Because government spending and deficits might, if not today then surely sometime in the future, lead to inflation.

So the search for sin – inflation – goes on, and here’s the bad part:  regardless of the cost.  It’s like some strange atavistic curse has overcome us, and we’ve turned the clock back to Phillip II’s inquisitorial war on heresy.  Phillip took it upon himself, and the Spanish, to defend Catholicism against the Protestant heretics and the pagan hordes of Suleiman the Magnificent.  It bankrupted Spain.  But according to Catholic orthodoxy, this was of no consequence.  “The Catholic Church holds it better,” wrote a Roman theologian, “that the entire population of the world should die of starvation in extremest…agony than that one soul, I will not say should be lost, but should commit one single venial sin” (William Manchester, A World Lit Only By Fire).   It did, however, produce some good art, such as Bruegel’s Massacre of the Innocents.  It is believed to be a portrayal of Black Alba carrying out the Spanish monarchs’ Edict of Blood in an attempt to suppress Protestant heresy in the Low Countries (Timothy Foote, The World of Bruegel).

Bruegel, Massacre of the Innocents

The result of any such a single-minded obsession is that there is a disregard for context.  The deficit hawks do not cast their arguments in a historical or socioeconomic context, but rather present them as ahistorical truths.  They do not argue, for instance, that inflation must be abolished only when it is present.  Rather, they hold to the same course even when inflation is nonexistent, and in fact even when deflation is the problem.  Not only does one size fit all; it is supposed to fit them at all times.

All this reminds me of a fellow I worked with when I first got out of college.  The guy was brilliant.  He was graduated first in his class from the Colorado School of Mines with a degree in Petroleum Engineering.  We called him Highwater Huzzey because of his exceptional height and because he always wore pants which bottomed out well above his ankles.   But I’m here to tell you, riding in a car with him was an unforgettable experience.  When the speed limit sign said 60 mph, Huzzey drove 60 mph, not one mph more and not one mph less.  To him, driving and road conditions meant nothing.   If the sun was shining bright and the roads were drier than a popcorn fart, he drove 60 mph.  If it was deep in the heart of night and rain was pouring down in torrents, he drove 60 mph.  If we went out to a lease, he drove on those dirt lease roads just like he would on pavement.   The cows and other livestock went running for their lives.  Furthermore, he didn’t slow down for potholes, even if it had rained.  The mud and water flew everywhere.  

One Friday evening after work we headed up to Taos, New Mexico to go snow skiing.   Leaving Las Vegas towards Taos the road heads up into the mountains.  It was narrow and winding, and because it had snowed a couple of days before was still icy and snow-covered in parts.  So here goes Huzzey, driving in his usual manner, oblivious to the road conditions.  Needless to say, we wound up in the bar ditch at one o’clock in the morning.

And that’s what I think is going to happen to the deficit hawks, as well as to the passengers – that’s us, by the way — riding along in the bus with them.  

7 responses to “In Search of Sin

  1. But Bible also says
    Mathew 6:11,12
    “Give us this day our daily bread(employment).
    And forgive us our (financial) debts,
    As we forgive our (financial) debtors.”
    Which if anything is highly inflationary. What is the modern day for of debt forgivness? Bankrupcy proceedings which sometimes allows retaining the asset enjoyed trough debt.

    Deutoronomy 15.
    “Debt jubilee every 7 years”
    What is the modern day version of debt jubilee? Moderate inflation with fixed interest rate debt.

    This knowlege of cyclical problem of debt in a market was known 3,000 years ago and it reapeard with Hitler and Keynes, also with Lenin who returned the right to issue any currency back to the state.

    • Jordan, this by no means was intended as an attack on Christianity. It was intended as an attack on fundamentalism. Christians, both of the Catholic and Protestant variety, are just like economists: they come in all stripes.

      As an aside, we do know that the religious wars of the 16th and 17th centuries were in some part motivated by more mundane concerns, including the debt problem you mention. It’s not always easy to tell where man’s material life leaves off and his spiritual life begins.

      “While we call them Wars of Relgion , it would be a mistake to assume that religion alone was responsible for the carnage,” Michael Allen Gillespie notes in The Theological Origins of Modernity. “Political, dynastic, and nationalistic factors clearly played a role in fomenting, perpetuating, and exacerbating the conflict. Machiavellian political techniques also undoubtedly made the killing more effective, but the fanaticism of the participants and the brutality they displayed were in large measure a manifestation of religious passions.”

      To me fundamentalism is extremely dangerous and destructive, whether it be of the traditional religious variety practiced by some Catholics and Protestants or of the secular religious variety practiced by some economists.

  2. Mark Robertson

    No deficit hawk understands inflation, or cares about it. “Inflation” is merely a buzzword that serves as camouflage. It is a mask that legitimizes the deficit hawk’s hate and selfishness, just as “sin” is a mask that legitimizes a preacher’s hatred of everyone and everything, including himself.

    More specifically, the deficit hawk is not obsessed with inflation, but with the unbearable idea that social programs help other people in addition to himself. Since only the deficit hawk is without sin, only he is entitled to “entitlements.” All other beneficiaries are Satan worshippers that must be “reformed” (i.e. annihilated).

    Cultists, fanatics, deficit hawks: they are all psychotic. Any attempt to reason with them is itself psychotic. Any attempt to deny or gloss over these facts is, again, psychotic.

    Therefore, let us shun the psychos, and try to reason with people who have heard the dogma of hate, but have not yet fully joined the cult.

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  4. Your quote is out of context: it’s from Cardinal Newman in the 19thC. I wonder if he was criticising fundamentalism by reductio ad absurdum.

  5. Just a thought:

    “This is so because ever since the Great Depression and Keynes and FDR (well actually since Hitler and his economists) we’ve known from experience that the surest way to end a deflationary spiral and a depression is through government spending and deficits. ”

    I actually say it goes back further to, ever since: Lincoln printing Greenbacks, debt free, and spending $450m into the northern economy to win the civil war. Everything worked pretty dam good from what I’ve read. But yes, the point is all too obvious, we need the govt spending when the private sector can’t or won’t.
    Can someone show me an example of where fiscal spending doesn’t improve the economy????

    This also begs me to ask, WHY……as soon as the govt finally spends enough money to get the economy growing, the fed always decides to raise interest rates and suck that new growth back out of the economy and into the banksters hands?

    BTW, after learning some MMT concepts, watching debt hawks is like watching the Crucible, dumbo’s crying about others practicing witchcraft…..sheez.

  6. Oh yeah,

    This post plays to a concept I call “self-imposed economic flagelation”.

    We must SUFFER DEARLY because:
    – The government is broke
    – China won’t buy our bonds
    – We can’t afford to repair our decaying infrastructure
    – We can’t afford to feed the hungry people who work full time but don’t earn enough to live.
    – We can’t afford decent healthcare for our citizens

    Joe Firestone has been screaming from the top of his lungs for the last year (long after all others seem to have forgotten) about how legally minting 1 stupid little platinum coin and calling it a $60T coin would provide enough “money” to fully pay of the national debt, fund people retiring at a decent age with dignity and some benefits, totally modernize our national infrastructure, ensure there is full employment, improve everyone’s standard of living, ensure enough demand so our capacity and workers don’t sit idle, etc.

    The only reason we don’t mint that stupid little coin, that I can tell,…is that it would be just too EASY.
    It doesn’t provide enough PAIN and SACRIFICE. It would appear to be the work of WITCHCRAFT.
    Hence we shall continue to endure, i mean, enjoy our self-imposed economic flagellation