“Woke ideology was heavily subsidized because of this fundamental economic dislocation that was built into the system starting in 2008. And now, 17 years later, the whole world’s gone insane because woke ideology has taken over corporate America and education,” says Jeffrey Tucker, founder and president of The Brownstone Institute and the senior economics columnist for The Epoch Times.
In a recent episode of “American Thought Leaders,” Tucker and host Jan Jekielek discuss how pandemic mitigation measures caused an economic disaster in which America’s institutional systems became a closed world of industrial privilege. They also discuss the Federal Reserve, interest rates, and the rise of vibrant, new institutions being founded across America.
They did something similar with the 2008 financial crisis, where they created a lot of money. They called it quantitative easing. But in that case, they incentivized the banks not to lend out the money, because they were paying a higher rate of interest to hold the money at the Fed than the markets would bear in the lending markets. The money stayed in cold storage, so it didn’t cause inflation.
In 2020 and 2021, they did the opposite. They just rained money down on the population. You would wake up one morning and the Department of the Treasury had given you several thousand dollars. It was just next-level crazy. And of course, this new money then fueled prices.
The price increases began in January, when Biden took office. In those days, they said, “This is transitory. It will be gone in no time.” Yet here we are, and over two years, we’ve seen a 16 percent increase in the price level overall. It migrates from sector to sector. One day, it’s eggs; the next day, it’s lumber.
The CPI and PPI numbers, the Consumer Price Index and the Producer Price Index, just came in for December, and they were terrible. We’re starting to see a re-acceleration of inflation, yet the national media isn’t talking about it. They pretend as if it’s still on its way to decline. But one of my jobs for The Epoch Times is to look at the data and tell an honest story so that we don’t keep living these illusions.
When the inflation began, they said, “We better do something, so let’s raise interest rates.” They broke a 15-year pattern of zero-interest rates and began raising them as a way of sucking money out of the economy, like sponging up a spill.
And sure enough, that has reduced the quantity of money substantially, but nowhere near enough to cover what they did over the previous three years in money printing and money creation. We’re nowhere near solving the problem.
Six trillion dollars of new money was created, and that’s got to wash through the economy. It’s got to become endemic, to use the language of viruses. Meanwhile, the prices have to adjust up, no matter what the Fed does now.
The price increases we’ve experienced over the last two years, we’re stuck with. We’re stuck with the lower purchasing power of the dollar, lower real incomes, which have been declining for 20 months, and our ability to buy goods and services at the same price. And it’s getting worse.
This is despite what the Federal Reserve’s doing. The interest rate increases that they’ve pursued over the last year are historic. We’ve never seen the Federal Reserve policy turn so dramatically. That’s having a profound effect on the structures of production in the industrial sector, but it’s not actually fixing the inflation problem.
So, it’s debt. The new money is financing the debt, and the debt is created by virtue of government spending. It’s all waste, and it’s not helping us recover. If anything, it’s doing the opposite. And it’s ruining our standards of living.
It was all too good to be true, of course. Meanwhile, everything has reversed. Savings rates went higher than 30 percent at the height of the lockdowns. Now, they’re down to historic lows. I don’t think we’re approaching 2 percent in personal savings rates right now. It’s a disaster.
And credit card debt is going way up. You’ve got people depleting their savings, spending more for less, because the inflation rate is going up. They’re starting to panic-buy and put everything on the credit card, except the credit card interest rates are going higher and eating up more of their now-declining real income.
In the blink of an eye, everything reversed. The riches we gained over 2020 and the stimulus payments of 2021 got eaten up with inflation. Now, household finances are falling apart. People are taking on second and third jobs, working themselves to the bone to earn money, but this money is buying less and less as our rents, energy bills, and food costs are going higher.
What’s shocking is that the planners from the very beginning of the pandemic had no interest in talking to economists. It’s like we had a dictatorship of public health officials, and the economists, even at the White House, were kept in a separate room.
“We don’t want to hear from you. Don’t tell us about the stock market. We’ve got a virus we have to take care of.”
But economics is about a lot more than the stock market. It affects every aspect of our life. It speaks to the very heart of the quality of life we live, which is also about health. All these things are tied together. You can’t separate public health from economics. That’s a preposterous idea.
One is loosely described as “woke,” which involves critical race theory, queer theory, and all sorts of policy associated with that. Then you have climate change, not whether it exists, but the need for big money policies that treat it as an emergency. There is ESG [Environmental, Social, and Governance], which fits into both areas. Are these ideologies driving this superstructure? Or is it using these ideologies to drive its own agendas?
What that did was massively distort production structures. Think of a yield curve with the right side involving long-term, heavily capitalized, and speculative ventures, and the left side of the curve as normal savings and everyday commercial activities. Zero percent interest rates made it impossible to profit from the left side of the yield curve and sent capital on a hunt for return. They found it on the far right side of the yield curve, which became Big Tech, big media, big education, big government, all these monstrosities.
That started in 2008, when the Federal Reserve chairman at the time, Ben Bernanke, said, “I’ll just do this quantitative easing, and as part of that, we’ll have zero-interest rates. We’ll have the Federal Reserve paying a lot more than that to keep the deposits in the bank, and it’ll be beautiful. All the banks will be fully recapitalized, and then we’ll just go on with our lives.” And there wasn’t any inflation. There seemed to be no downside at all.
Education and health care got completely out of control, and technology and media became consolidated. They had all the resources in the world, so they kept hiring more and more people, sucking more of the labor supply over to their side. That’s when we suddenly got ESG and DEI [Diversity, Equity and Inclusion], and the whole ruling class became captivated by this nonsense, because we had no economic rationality in this system.
But here’s what’s fascinating about this story. With the pandemic response, we again got quantitative easing, but this time, they didn’t lock it away in the mattresses or in the banks. The effect was inflation. Now, you’ve got the Fed panicked. The only thing they can do is reverse this long policy of zero percent interest rates, so they started doing it. And the rates are rising. They’re rising like crazy.
The consequence has been to reverse this pattern that dates all the way back to 2008, of the massive subsidies going to the right side of the yield curve. Now everything is gradually shifting to the left side, which is why you can go to your bank now and save money and make money at the same time. We haven’t been able to do that since 2008. You can buy a CD that earns 5, 6, and 7 percent.
So you’ve got capital losing interest in the right side of the yield curve with all the speculative investments of the big media, and Big Tech and all, and the overproduction and oversupply of labor on that side. Everything’s migrating now back to normalcy. And with that, we’re seeing a decline of interest in woke ideology and DEI and ESG, and all these things, because they’re not profitable in this new normal world of rising interest rates. The slogan, “Go woke, go broke,” is really coming to life. That’s why you’re seeing the constant rounds of job cuts in Big Tech.
And people know what’s coming. There is going to be a gradual euthanasia of the overclass in the corporate and media sector. It’s already taking place, and it’s going to get more intense, and it’s good.
I’ve been writing about this for The Epoch Times. These people are toast. They’re going to lose. I don’t care what your credentials are, your six-figure salary doing nothing and Zooming at home is coming to an end sooner rather than later.
That didn’t happen. Those ideologies bled out of the academy and into all the institutions, the corporate boardrooms, the investment stock portfolios, the government, and the media. It became a fast-spreading cancer, and it happened because of the industrial misalignment of the corporate sector, due to the distortion of interest rates.
The Hasidim in New York went on with their lives. They still had their weddings and their funerals. The Amish were the same. There appeared some reports about Mormon communities, and later, the Evangelicals, who said, “Boy, this is dumb. We’re not going to be told we can’t go to church on Easter.” It was the religious communities, including traditional Catholics, that had a stronger sense of meaning in their lives that gave them a driving purpose, and the propaganda couldn’t invade that sacred space.
But if you don’t have any sense of purpose or meaning, anything to live for that you truly believe, then you’re vulnerable. We saw that play out over the last three years. It’s undeniable that the people who fared best during the pandemic years were the strong believers. If you want to protect yourself from government propaganda, from being manipulated, you need faith. You need to believe in something.
The schooling aspect, for example, is remarkable. When public schools were shut down because of the pandemic, moms and dads sat down with their kids for their lessons, discovered what they were studying, and didn’t like it at all. So they got active in their schools, or decided to continue to homeschool, or put them in private schools. We have seen the most dramatic educational upheaval.
These are exciting times to be alive. People can make a real difference, and now they know that they must. There are new institutions founded, new civic associations, new clubs, new political activist organizations, and new industry groups. It’s beautiful.
It’s an ongoing struggle, and freedom is never finally secure. It’s something we always have to fight for. All of us, every generation, has to fight for it.
That’s the lesson. We can’t pretend to just go along for the ride anymore. We have to throw ourselves into the great battle for the good life, for human rights, for our freedoms, and for civilization. We have to teach our children to do the same, and they have to teach their children. That’s the way you save freedom and civilization.
