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The Economic Reality Of The “Great Reset”

Current Events Macro

Now, I'll go ahead and take the tinfoil hat off.

Although you have to admit, Klaus Schwab sure looks like he could come straight out of a James Bond movie.

Human Behavior Dictates People Will Always Pursue Self Interests

First, we need to understand that people are always going to pursue their own self-interest and the interest of their families.

It's not to say they won't give to charity or be altruistic, but it is to say that they're going to prioritize their own self-interest and their family.

Regardless of what culture I've experienced around the world, what ethnicity, it doesn't matter. People all fall into this category.

It's hard-wired into our brain and it's not going to change.

“There are no solutions, only alternatives.”

I'd like to point out what the great Thomas Sowell always reminds us,

“There are no solutions, only alternatives.” – Thomas Sowell

Why is this? Because we're dealing with scarce resources that have alternative uses.

What I mean by this specifically is regardless of what you're doing, we always have to include a cost-benefit analysis.

It's very easy to focus on the intentions of some regulation, law or program, and totally ignore the actual results.

The Great Reset Agenda Simplified:

  • Klaus and the cronies want to increase regulations and taxes.
  • Everything needs to be green.

I'll explain how this can play out in a little simple example using my whiteboard drawings. Check it out!

Klaus Vs Farmer Frank

I'll use Farmer Frank, who is right in front of the Elon cyber truck and Moody the Millennial is off to the left.

Let's suppose Farmer Frank has a plot of land and he's growing wheat and corn to feed society.

Klaus Schwab (the one with glasses and a cat) visits Farmer Frank and says,

“Listen, Frank, from now on you have to buy cyber tractors in order to earn a living as a farmer. Stop buying dirty diesel tractors from Caterpillar at once.”

This ‘forced moved' has effectively removed efficiency from the marketplace.

Why owning a diesel tractor is more efficient than owning an Elon Cyber Tractor

Up until Schwab came along, Frank had been successfully using diesel tractors in his farming business for years. And we know that Frank knows more about farming than Klaus Schwab ever will.

As a result, Schwab has directed human ingenuity, materials, and capital towards building cyber tractors now since forcing artificial demand.

By forcing farmers to buy cyber tractors, the government has created false incentives and inefficient markets. 

I'm not saying that we shouldn't focus on green energy. What I am saying is that it should be driven by market demand.

It should be a bottoms-up approach, not tops down. If it is top-down, we're most likely going to have this misallocation of resources that are very scarce, I'd like to point out.

Hiring Based On Merit Will No Longer Matter

On the left of my drawing, we also have Moody the millennial. And of course, it is “they” because I don't know Moody's personal pronoun. But what I do know, is that Moody does not like work.

(They are giving it a thumbs down because they don't want to work in this farmer's field at all.)

In Klaus Schwab's world, Farmer Frank would have to hire Moody because he needs to fill his mandated quota with someone from a minority group. Say someone within the LGBTI community.

If Farmer Frank doesn't hire Moody, and he gets caught hiring someone else, then he could face severe consequences.

equal outcomes are more important than equal opportunity

The Great Reset Agenda believes that equal outcomes are more important than equal opportunity.

They would rather rig the system so disadvantaged minority groups fill quota's that Klaus, the cronies, and Mr. Bigglesworth deem important for society regardless of Farmer Frank's actual needs in the labor force.  

We also know for sure that moody is going to offer a lot less productivity than someone that Frank would hire based on merit alone.

What we have in this very simple example is:

  • Misallocation of scarce resources.
  • We have less economic output – which is going to lead to a lower standard of living.

Supply destruction creates prices inflation

Why will there be supply destruction in the markets? Because Frank can't produce as much wheat now that he has less productive workers and expensive machines that he didn't need.

If Frank can't produce as much wheat, then someone else will have to take up the slack and grow more food to meet demand. This imbalance causes prices to increase.

The person taking up the slack for Farm Frank could have pursued a career they actually wanted to do, like became a doctor, scientist, or engineer that could have worked on something like green energy.

But now they can't because they're going to have to grow wheat or they're going to have to spend more time growing their own food just to survive.

Supply Destruction and Inflation – It's Already Happening

I also like to point out that we're seeing supply destruction, and now consumer price inflation play out in real life due to big government's mishandling of Covid-19.

We've seen what it looks like when economic activity goes down by 75%, 95%, 85%, whatever. It's not good.

It gets really ugly, very fast and we haven't seen the worst of it because central banks and big government have flooded the economy with stimulus packages that will most likely NOT be temporary.

And if they are permanent, it's going to lead to an even worse outcome through higher inflation and a loss of purchasing power.

Forcing People to Behave Is Not The Answer

I'm not saying that we shouldn't strive to have greener energy.

I like breathing clean air, and I'm not saying we shouldn't try to eliminate discrimination.

But what I am saying is that we need to persuade individuals to think intentionally about what they consume, so it leads to better outcomes.

We shouldn't try to force people into doing something, and we definitely shouldn't regulate them into doing this or that, either.

A business needs to be profitable in order to remain sustainable

Now, about sustainability. I hear this word all the time. To be sustainable, we need to always remember that it has to be profitable.

I think in today's day and age, we've completely forgotten the concept of a business needing to actually make a profit.

If we have businesses that are zombie companies feeding off the government, that's always going to come at the price of future taxation or inflation, and most likely a lower standard of living.

Why the bottom-up approach works

But really the takeaway is it has to be a bottom-up type approach. You've got to convince individuals in the real economy to want to take specific actions, and the entrepreneurs will satisfy those needs and wants.

We can't have this tops down approach or the results are going to be even worse than what we have today, regardless of the intentions.

Why the Top-Down approach doesn't work

Below are two common arguments favored by top-down advocates:

  • We can't rely on entrepreneurs because they're greedy.
  • We must have reliable, benevolent, and virtuous public officials to ensure the greater good of society.

These arguments are fundamentally flawed, and nobody explains why better than Milton Friedman.

Phil Donahue: When you see around the globe the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries…when you see so few haves…and so many have-nots…when you see the greed and the concentration of power.

Did you ever have a moment of doubt about capitalism and whether greed is a good idea to run on?

Milton Friedman: Well, first of all, tell me…

  • Is there some society you know that doesn't run on greed?
  • Do you think Russia doesn't run on greed?
  • Do you think China doesn't run on greed? What is greed?

Of course, none of us are greedy. It's only the other fella who's greedy. The world runs on individuals pursuing their separate interests.

The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat.

Henry Ford didn't revolutionize the automobile industry that way.

The only cases in which the masses escape the kind of grinding poverty you're talking about – the only cases in recorded history – are where they have had capitalism and largely free trade.

Phil Donahue: If you want to know where the masses are worst off, it's exactly in the kinds of societies that depart from that.

So the record of history is absolutely crystal clear that there is no alternative way – so far discovered – of improving a lot of the ordinary people than the productive activities unleashed by free enterprise systems.

It seems the reward is not ‘virtue' as much as it is the ability to manipulate the system.

Milton Friedman: What rewards virtue? Do you think the communist commissar rewards virtue? Do you think Hitler rewards virtue?

Excuse me, if you'll, pardon me…Do you think American presidents reward virtue?

Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout?

Is it really true that political self-interest is nobler somehow than economic outfitters?

I think you're taking a lot of things for granted. And just tell me, where in the world will you find these angels who are going to organize society for us?

(End of the interview)

the world economic forum's Failing Future

Do you honestly think that Klaus and his buddies at the world economic forum are those angels that are going to lead us to this utopian future?

Do you honestly think they're less greedy than those capitalists or they're more virtuous?

The only thing we're going to get from this great reset is:

  • More cronyism
  • More corporatism
  • A lot less personal freedom.

And that's if we don't have the tinfoil hat on. If we take that tinfoil hat, put it back on, it gets real crazy once you go down that rabbit hole.

Part 3. Read More