To my millions (or is it billions?) of loyal and dedicated readers, I'm sorry to have been remiss in my production of these critically important musings. I understand you desperately need them and don't know quite how to react to the insanities and inanities of the modern world without them. Well, I haven't been well - or at least as well as I have become accustomed to being. I've had a summer cold (yuck!), and then some sort of diabolical digestive difficulty, and, of course, there is the matter of that seriously defective heart. But I have managed to continue on with my farming, and my trapshooting, and I've even done a few household plumbing repairs.
Anyway, time for more musing. I've been watching the stock market gyrations. The leading U.S. purveyor of business news on cable TV is CNBC. It should be renamed "TOUT-TV," because that is what it does. The talking heads are just about all stock salespeople. Asking one of these people if now is a good time to buy stocks is like asking a real estate agent if now is a good time to buy a house, or asking a car salesman if now is a good time to buy a car. Of course it is!
These people (and I may be using the term rather loosely) seem to think (or at least would like you to think) that there is a proper price for stocks, and that price is always a little higher than it is right now. The very notion that stock prices can be, and sometimes actually should be, lower than they currently are seems to have never occurred to them. Well, let's face it - their business is selling stocks. People won't want to buy stocks if they think the price of stocks will decrease, so the stock touts always assure us that the price of stocks will increase. What else could we expect them to say? And why do we pay any attention to what they say anyway? It's not like they have any incentive to tell us what they really think stock prices are likely to be in the future. No stock salesman ever got fired for touting stocks, even just before a stock market decline of truly biblical proportions. Instead, they are admired for at least trying to head off the decline. After all, stock price declines are bad, always bad, and doing whatever it takes to avoid such an eventuality is always admirable. A client lost some money in the market? Well, sometimes sacrifices are necessary - so long as they are other people's sacrifices...
Larry Kudlow is one of the most ardent supporters of free market capitalism on CNBC, or so he says. He is always going on about how much better free market capitalism is at creating wealth than any other economic system. He is, of course, absolutely right about that. Anyone pushing any other economic system is, in fact, advocating that people on average be less free, and poorer to boot. Oddly enough, most of these people consider themselves great lovers of humanity. What a bunch of damned jackasses! Anyway, there was Larry Kudlow, great supporter of free market capitalism, urging the Federal Reserve System to open up the money supply spigot so the stock market won't continue declining. That is wrong in so many ways.
In true free market capitalism, the prices of stocks increase and decrease based on the willingness of market participants to buy and sell stocks. Up is not inherently better than Down.
On one afternoon Larry Kudlow had in his panel of experts a singularly different sort of person. This person, and I sadly have forgotten his name, was asked what the Chairman of the Federal Reserve should do about the stock market. He answered (paraphrasing), "He should resign."
Larry Kudlow asked if the Chairman had really done that poorly. "No," the panelist explained, "He should resign because we shouldn't have a Federal Reserve. We should have the gold standard."
Well, it was as if a small boy had farted at a church picnic. No one else would even admit to have heard what the poor man said, except one lady stock touter who assured us that the Federal Reserve is very important.
So, I'd really like to know how Larry Kudlow and his army of stock-touting friends of free market capitalism can believe that we can even have free market capitalism without a free market in capital. It is quite a mystery.
