2/15/24 Peter St Onge on How the Fed is Making You Poorer
Feb 20, 2024
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Economic expert Peter St Onge discusses how the government and Federal Reserve make people poorer, drawing comparisons to past economic crises. They explore the impact of recessions, inflation myths, and economic news in China, debunking common misconceptions about capitalism and government intervention.
Government enriches elites via the Fed, harming the public economically.
Xi's oppressive regime in China raises concerns about human rights and US relations.
China's shift from capitalism to government control impacts global economy and competition with the US.
Deep dives
Concerns About the Chinese Economy
The Chinese economy, under the leadership of President Xi, has shifted towards more government control and intervention. This has led to a massive influx of subsidies into manufacturing and housing sectors, resulting in overcapacity and a significant decline in these industries. Xi's authoritarian rule has also caused concerns, as he has arrested individuals who criticize the government, including prominent figures like Jack Ma. The Chinese economy is currently experiencing a downturn, with a stock market crash and significant layoffs. However, the long-term potential of China's human capital and its ability to compete with the US cannot be ignored.
The Evils of the Chinese Government
The Chinese government, under President Xi, is widely regarded as one of the most oppressive and evil regimes in the world. They have committed gross human rights violations, such as persecuting Falun Gong practitioners and Uighur Muslims. Xi has consolidated power and made enemies within the Chinese government, leading to a totalitarian regime. Despite their oppressive actions, there is debate about whether there is a need for the US to go to war with China. While China's aggressiveness and desire for dominance in global affairs is a concern, the US does not have any immediate reason for military conflict and should focus on protecting its own interests.
China's Previous Economic System
Before President Xi's leadership, China had adopted a more capitalist approach, with a free market economy and an emphasis on joining the global community and improving the lives of its citizens. However, Xi's policies have shifted towards increased government control and a push for dominance. China's economy has seen significant growth and development in the past, but the recent changes under Xi's leadership have raised questions about the future trajectory of the Chinese economy.
China's Potential Dominance
Looking at the long-term perspective, China has significant potential to outperform the US economically. The country has invested heavily in human capital and has a well-educated population. The US, on the other hand, faces issues with its education system and a lack of focus on critical industries. While this may not directly harm the US, it does raise questions about the country's ability to compete in the global market. However, the US and other countries can make efforts to adapt and improve their own systems to remain competitive.
The Need for Government Reform
The discussion around China's economic dominance should also prompt a broader conversation about the role of government and its impact on economies around the world. Both the US and China have faced challenges due to government intervention and corruption. Addressing these issues, promoting free markets, protecting property rights, and focusing on individual liberty can help create a more prosperous and fair global economy.
Scott is joined by Peter St Onge to talk about how the government uses the Federal Reserve to enrich the politically connected at the expense of everyday people. St Onge explains how we arrived at this crazy economic moment and draws comparisons to the stagflation of the 1970s. He and Scott also talk about the destructiveness of recessions, debunk common myths about inflation and discuss what’s happening in China.
Peter St Onge is an economist at the Heritage Foundation and a fellow with the Mises Institute. He makes daily videos breaking down economic news. Follow him on Twitter @profstonge
