There is a vast amount of hand-wringing and angst going on about how we can either save the economy by re-opening, or we can let the economy crash and save lives. Of course, the economy crashing (and the US unemployment rate will probably hit 30 percent) will cause the loss of lives also.
This is a manufactured, completely unnecessary choice.
To understand why, you have to understand three facts about money:
- Money is imaginary. It is a fiction created by humans. People are not fictions. Land is not a fiction. Buildings are not fictions and neither are physical objects. Money, even when it exists in paper form rather than 0s and 1s in a computer, is fictional. It has value only because we agree it does.
- Money is used for two things: First, it determines who controls what. Can you control land, people, or objects? If you buy land or an object, you control it for as long as you own it. If you hire a person, you control their time. Money is control of people, land, and things.
- Second, money is a feedback mechanism. If people who have money want less of what you offer, you get less money and control less people, land, and things. If people who have money want more of what you offer, you get more money and can control more people, land, and things. (What people who have no money think is of no concern.)
What Covid-19 closures are doing is providing feedback–“people with money want less of these things.” That causes the people who control businesses, or live in apartments, or have to pay mortgages to run out of money, and lose control of those things. Businesses go out of business. People can’t pay rent or mortgages or their employees.
That causes an economic crash.
This is 100 percent unnecessary. We want feedback in an economic system because we don’t want people doing things that other people don’t want or need (or, in Capitalism, other people with money).
But when a one-time event happens which does not reflect a fundamental shift in what people want (i.e., this pandemic will end) then you actually want to stop the feedback, because it’s bad feedback. You don’t want to change long-term economic arrangements because of something that is a one-time event.
So, because money is fictional, because we just create it out of thin air (central banks create trillions routinely), this means that we can do one of two things:
- We can just give people who have lost their income due to Covid-19 enough income to pay their bills
- we can freeze payments up and down the line – rent, mortgages, interest payments.
Or, of course, we can (and should) do a combination of these two things.
When Covid-19 closures have clearly run their course, we stop doing these things. If there are permanent changes (a lot of people keep working from home, or we don’t get a vaccine and restaurants aren’t going to be popular again) at that point the feedback is allowed to operate.
To allow a one-time event of limited duration to fundamentally reshape the economy means one misunderstands what an economy is. An economy is not money, it is people, land, and objects. Those are what must be preserved, not money. When the one-time event is over, if those objects still exist and are still controlled by people who can use them to create what other people want, then the economy has been preserved.
To allow people to die to preserve the economy is idiocy: It hurts the economy. People are the economy; it is people and natural resources which produce everything of value.
So, when people squeal about the economy vs. lives, understand that they don’t know what an economy is or how money works. Or, they do know how money works and what an economy is, but they are taking advantage of the situation to give themselves more money, and are good with other people dying while they get more money, because they are concerned with their relative position.
If the Fed and the government give rich people lots of money, and everyone else not much, and if assets become cheap and can be bought out, and if small businesses go out of business, at the end the economy is smaller, BUT the rich people control more of it
And that’s what they want. Too bad your grandma and your dad have to die for it, but that’s not their problem.
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