I was fishing around in my drafts folder on WordPress and I found a sort of interesting post that I had started but that never found its way to being published. It’s from May 20, 2012, and appears ambiguous to me now as I never filled it out with links to what had elicited my fiery response. Whatever it was, it must have been outrageous. Perhaps it was a response to Major Freedom, a commenter on The Money Illusion to whom I owe my utmost gratitude for inspiring me to start my blog, but the world will never know. I imagine that after I had a chance to cool down, I decided that discretion was the better part of valor and declined to continue working on it.
But since discussions of ABCT have again come to the fore in the MM blogosphere, Scott Sumner has one and so does David Glasner (both very good, serious posts – unlike mine), I figured I might contribute in some very small way, if only the laugh factor. This, after all, is where I coined the phrase “mattress-stuffer model” as a synonym for the school of thought followed by many internet Austrian commentators (not serious Austrian economists) I have encountered over the years.
My response to a mattress-stuffing Austrian
While the technical arguments you present may be based on some small grains of truth somewhere, I find the unwillingness to acknowledge the totality of differences in overall effect between your pro-stagnation mattress stuffer model and a pro-growth risk-taker model while disseminating fabrications of omission in anti-Fed propaganda that is falsely couched in libertarian ideological principles in order to render the public more accepting of the imposition of the mattress stuffer model upon them through sleight of hand from outside of the political system quite despicable. There is nothing libertarian about it. It is anti-democratic, anti-capitalistic, ultra-conservative statism at best.
The strategy from your side of the debate seems to be to win with obfuscation of pertaining facts with no worry about winning the vote because the Fed already partially imposed what is desired while being completely disingenuous in congressional testimony about its ability to deal with the things that are upsetting people: a dysfunctional employment market, the lack of opportunity, the high cost of safety net programs and the number of people in them. There is very little commonality in opinion with mattress stuffers regarding irrational fear of capitalism and free markets, and utter terror regarding what people might do with their money when left to their own devices leading to the preference that they don’t have it in the first place. The mattress stuffing model assumes that the less they have to throw around the better, to provide for mattresses being stuffed instead and the value of the stash appreciating, with no risk involved, but leaves out all accounting for the opportunity cost to society as a whole as the Fed tightens the screws, as well the much higher direct taxes you will pay out of your stash, with far fewer payers responsible for huge debt. Surely you’re aware that you’re not going to get to keep the value realized at the expense of others.
If you told the truth about what the mattress stuffer model means to our economy, standard of living, way of life, and to the people already devastated by the economic disaster you would lose before you even started to debate the merits of mattress stuffing, just like back in the 80’s because the tradeoff is tangible, not fake. I’m pretty sure that those of opinion similar to the mattress stuffers already know that, and that is why questions about what it means to average people are dodged by spewing even more inflation Chicken Little propaganda, as if there isn’t enough of it around already from the Fed-apologist media and similarly situated intellectually deceived mattress-stuffing propaganda victims. It’s the gift of deprivation that keeps on taking.
The principles of mattress stuffing seem to be working out really well for Europe, Angela Merkel and Germany in particular. We can watch what happens over there on the social and political level and get a pretty good idea of what’s in store for us because we really are not too far behind. When it does come to full flower here, I hope that at least you are satisfied because no one else will be and I highly doubt that there will be anything resembling societal tranquility involved in the response.