Soviet economist Nikolai Kondratiev was Stalin's chief economist. He studied capitalism, identifying and coining what's called the Kondratiev wave. The wave represents the cycles of an economy in seasonal terms --- spring, summer, winter, fall and the green shoots.
Spring is all about new ideas, change. During summer, things get a little relaxed, lazy. In the fall, leaves start to die and then transition into a winter --- a recession or depression. And then, spring again, the green shoots --- new ideas --- start to sprout up.
That's exactly how America once worked.
"If you look back at the American wave, up until the Fed, those were happening about every ten to 20 years," Glenn said Friday on The Glenn Beck Program. "And you see that we were going through very short, less than-a-year depressions. And everything would crash --- come crashing down. And then there would be this depression where everybody would be like, 'Oh, my gosh. I'm out of money.' But within a year, things started going up again."
When the government became too involved, choosing winners and losers, it interrupted the natural flow of things. Problems didn't corrected fully and purely.
"Every time we try to get government involved to slow it down, what it does is it adds a layer of corruption and allows people to be more and more stupid and not pay for their sins," Glenn said. "It allows for corruption to happen in the banking system and never have to pay for it. Because somebody will bail you out. There's no real cost to that."
The solution is smaller government.
"That's why we have to get off of the Fed. That's why we have to get back to the Constitution," Glenn said. "That's why we have to get back to a real free system."
Listen to this segment from The Glenn Beck Program:
Below is a rush transcript of this segment, it might contain errors:
GLENN: Yeah. Okay. Why? Why?
If you go back and you look and you look at the Kondratiev wave, which is the spring, summer, winter, fall, the green shoots. Okay. This was Kondratiev. He was Stalin's chief economist, and he went back and looked at capitalism.
JEFFY: Pat and I were just talking about the Kondratiev wave.
GLENN: Shut up.
PAT: We were doing that documentary on Kondratiev a while ago. Remember that?
JEFFY: Right! And it goes up and down with the green shoots.
GLENN: Just let me know when you're done.
PAT: Okay. I think we're done.
GLENN: Okay. Good.
So the Kondratiev wave where the spring comes. New ideas. And people start to -- kind of like tech industry. Okay. New ideas. New things are happening. And you can see these green shoots that, oh, my gosh, everything is going to change. But then it kind of settles in, in the summer, where all of these companies get fat, they get sassy, they get lazy. And they're like, "You know what, we're going to be here forever."
Then you start to see autumn. And you start to see the leaves change, and the seasons change. And you're like, "You know what, something is going to fold here. Something is not right." And everybody hanging on and hangs on and hangs on, until all the leaves are gone. And then it's in the winter. And it hammers into winter, which is a recession or a depression.
Then it balances things out, and you start to see green shoots again. Well, if you look back at the American wave, up until the Fed, those were happening about every ten to 20 years. And you see that we were going through very short, less than-a-year depressions. And everything would crash -- come crashing down. And then there would be this depression where everybody would be like, "Oh, my gosh. I'm out of money." But within a year, things started going up again. Okay?
It's like burning the underbrush of a forest. You have to burn an underbrush, otherwise the entire forest will burn down.
This is what the fed was to do. The fed was to stop those depressions and those giant spikes. Well, they didn't, did they? They've spaced them out farther, but they've made them bigger. So the -- we never had a Great Depression before. We had depressions. 1920 was a depression deeper than 1933. 1929, 1933, deeper than the Great Depression. But because we didn't have the Fed -- the Fed was not prepared to turn all the levers. It was over within a year, and it led to the Roaring Twenties.
So every time we try to get government involved to slow it down, what it does is it adds a layer of corruption and allows people to be more and more stupid and not pay for their sins. It allows for corruption to happen in the banking system and never have to pay for it. Because somebody will bail you out. There's no real cost to that.
That's why we have to get off of the Fed. That's why we have to get back to the Constitution. That's why we have to get back to a real free system. And a real free system doesn't include special payments to the government so they can prop up a certain company.
When he talks about, you know, the drug companies and you can't do anything about it, his solution is, control the drug company. Well, that will lead to less and less innovation and ground-breaking drugs. So his idea is, let's control it. Instead, what you should do is get the drug companies out of the lobbying business entirely. There shouldn't be the lobbying business in Washington.
When you start to have these big companies lobby -- why were the drug companies, why were the insurance companies for Obamacare? How is that possible?
PAT: Because --
GLENN: It was good for them.
PAT: Yeah. Big-time good for them.
GLENN: It was good for them. It's bad for us. But their lobbyists got in and made it good for the elites and for the companies. And we all lost. That's why you have to clean up the corruption. And the only way to clean up the corruption is to make the government small enough to where it doesn't matter. It stays out and lets people do their own thing. And you let those companies rise and fall. If somebody is going to screw the public -- yes, people are going to get screwed. People are going to get hurt. But it will happen, and it will happen quickly. And the government's job is to put those people in jail, period.