Uncovering the Truth Behind the Economic Golden Age
As I gazed out the window of an American Airlines 737 last night at a ravishing multi-colored sunset, while thunder, lightning and hail pelted Washington below me, I felt I was living my dream of a new economics.
My readers should be cottoning by now to my time theory of money, now elaborately advanced by economists Gale Pooley and Marian Tupy.
On the magic carpet ride of the time theory — far above the murky, menacing clouds of conventional data — everything is suffused with an eerie roseate glow.
Time-prices measure costs by the time it takes to earn the money to pay them. This is self-evidently the correct way to think of prices. When you run out of money, you are actually running out of the time to earn more.
This simple metric of hours and minutes belies the muddle of floating currencies and “purchasing power parities.” It falsifies all the political flimflam of consumer price indices, GDP deflators, and producers price indices.
It obsoletes all the other subjective political price patches with their “hedonic” adjustments for technology and “corrections” for prices the politicians don’t like, such as for “volatile” food and energy.
The Start of a Bountiful Era
Measured in time-prices, we are living in an economic golden age (missing only the measuring-stick of a gold standard to give meaning to its monies).
In the world of Tupy-Pooley’s revelations, looming debt loads wither as growth surges.
Stock market “bubbles” solidify as innovation and productivity flourish. Inverted yield curves and negative interest rates return to normality because it is actually inflation rates and expectations that are sharply negative.
This isn’t monetary deflation (there is plentiful money) but the good deflation that results from constant innovation lowering prices and accelerating times across the entire economy as everything gets faster and cheaper and better.
The only costs that rise in real terms are the cost of government programs and guarantees that stifle learning and growth. The chief offenders are such industries as education and health insurance under the thumb of the administrative state.
But such innovations as blockchain and online classes are emerging to curb runaway government expenses around the world.
Using a single number of hours and minutes, time prices gauge innovation by capturing both its effects: rising incomes and sinking costs.
Tupy and Pooley show that since 1980, world abundance measured by time-prices has risen 518.98%. As world population continues to grow and grows rich — as countries such as China and Korea become world industrial leaders with globalized trade, as trade gaps burgeon, the abundance of commodities grows ever faster.
Poverty plummets everywhere freedom reigns, and the middle-class thrives as US and Chinese capitalism converge their bounties.
Gone are fears of globalization and trade imbalance, the threat to the US from China’s ascendancy, and the continuous noise of complaints against bad weather. Banished are theories of declining innovation, resource shortages, environmental perils, or middle-class income stagnation.
Tupy and Pooley recently showed, for example, that since 1986 for a typical blue-collar worker the time prices for an elaborate Thanksgiving dinner had dropped from around 32 minutes to 9.2 minutes. The real problem of the middle-class in America may be that they eat a thanksgiving dinner every day or so.
Posing the only real threat to this happy scene are the politicians. In their grim global rebellion against the truth of time. They don scarecrow costumes of false disasters such as climate change, trade gap trumpery, debt doom or middle-class woe.
They scowl and leer and demand more power. They rant and vamp like vandalistic clowns of an apocalypse that will never come unless they summon it with their own lunatic fits and furies.
The truth is, time-prices will triumph over the next five years.
All the doomsday enthusiasts gathering on mountaintops to bewail the coming catastrophes of climate and debt and other disasters will quietly return to their homes to enjoy the good fortune of living in America today.
The trade warriors will go back to their caves clutching the revelations of Adam Smith from the 18th century and the findings of Pooley and Tupy today.
Editor, Gilder’s Daily Prophecy