In a free market economy, the market is the economy. There's no distinction. However, in a regulated economy, the market deviates from the economy. Prices no longer reflect underlying demand and supply. They reflect tings like, licences, central bank credit, and central bank lending rates. The more regulated and manipulated the market is, the more it deviates from the underlying economy.
This means that it's a mistake to look at markets in order to divine what may be going on in the economy. Yet, this is precisely what the elite tends to do. They are so tied to the fluctuations of markets that they've come to see it as their lifeblood, and the lifeblood of everyone else. They are therefore likely to misinterpret reactions to tighter financial conditions.
When the elite sees prices of stocks and real-estate go down, they assume that this must hurt the little guy. They are themselves exposed to the pain, and assume that those smaller than them must feel the pain all the more.
This impression is strengthened by stories about ordinary people getting caught in the net. Such stories abound in times of financial tightening. There's no lack of people who borrowed too much. The impression is that just about everyone is bankrupt.
The sadistically inclined may then conclude that the pain to them is worth it, and that the tightening should continue. As long as there are stories about people in even more pain, they tolerate the increased pain to themselves. However, they aren't being told the full story. Not every little guy is suffering. Only those deep in debt are in trouble. Prudent savers see their purchasing power strengthened by the day.
The irony in this is that sadists may inflict great damage to themselves in the mistaken belief that they are hurting others all the more. But the only ones hurt are themselves, and those they tricked into their web of lies. People beyond their reach will thrive, and the gap between rich and poor will become smaller.
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| Grand-Bazaar |
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