The New York Times Fails Logic Class, Chapter 46,080

By Karl Denninger

There's an old saying that goes something like this:

"One definition of insanity is doing the same thing over and over again but expecting different results."

That would fit the NY Times editorial board.

In the United States, nearly one-third of adults, about 76 million people, are either “struggling to get by” or “just getting by,” according to the third annual survey of households by the Federal Reserve Board...

...Over all, the survey depicts an economy in which many Americans face daily hardship, while even the college educated — the presumed winners in the economy — still face big obstacles. The findings argue for continued low interest rates; for government policies and federal spending to help create good jobs at good pay; for affordable education that starts at preschool, thus fostering college-ready students; and for a safety net that can withstand today’s potent economic forces.

Oh really?

For the last 20+ years every hiccup in the economy has been met with "very low" interest rates.  Rates have now been at emergency levels for a period of time approaching eight years.

It hasn't worked to lift people out of that malaise, and the reason is obvious: The lower rates are the cheaperit is in "today's terms" to borrow and those who can and do borrow first have "first mover" advantage.

Those entities are never those with fewer privileges and poorer net positions in life.

That means it's never any of those who face said daily hardship that reap said advantage -- it is instead those who exploit that segment of the population and they use it to screw everyone else!

Witness Uber, who is "leasing" cars to "drivers" at slavery-like conditions.  How?  Because "money is very cheap", that's how.  How is it that Tesla, which makes cars nobody in the "struggling" class can afford, is in business with a loss-making enterprise?  Same answer.  How is it that college has gotten so expensive that you now can easily rack up $100,000 in debt to get a worthless degree and just three decades ago you could flip pizzas and pay cash to go to school?  Same answer.  How is it that the average new car loan is now six years and payments are often $500 or more, never mind the average new car sale topping $30,000?  Same answer.  Why has medical cost increasing at 7+% a year and now comprises 37% of the federal budget, doubling every 10 years for the last 2 decades -- a trend that cannot continue for another 10 years as it will then consume more than the available cash ex interest payments?  Same answer.

In 1920, faced with a massive over-capacity problem (fueled by speculative stupidity over the end of WWI, the return to civilian production and the boys coming home) and a crashing economy The Fed, then 7 years old raised interest rates into what was an incipient depression and the federal government balanced the budget.

The result?  In 18 months the economy had fully recovered (as had employment) and we posted the highest rate of growth in industrial production ever recorded in American history.

The only reason that event is not called a Depression is that it was over almost before it began because instead of coddling those who were exploiting people in the most trouble and protecting those who had made foolish investment decisions with their capital surplus both the government and Fed instead pulled away the pacifier and allowed the markets and economy to do what it does when left alone -- clear uneconomic decisions through bankruptcy and transfer of assets from those who did dumb things to those who do smart things.

There is no answer -- ever -- to be found in protecting idiocy, monopoly, exploitation and predatory behavior, all of which riddle our economic landscape today.  The worst examples are found in exploiting those who have the least going on between their ears and thus the least ability to analyze and resist the siren call of "cheap money" -- including young adults and those in the most-desperate of situations.

Thus the two biggest scams of today: College and medicine, along with all that surround both; the former has now generated over a trillion in debt that as a 25% delinquency rate (!!) and the latter routinely financially destroys any middle-class American who gets sick whether they have "insurance" or not, never mind being nearly one dollar in four that the federal government spends along with one dollar in five in the broader economy.

The NY Times editorial board either does know this and is in the back pocket of those doing the exploiting or they're too stupid to survive.

Pick one, but don't drink their grape Kool-Aid -- it's laced with cyanide.

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