Saturday, October 11th, 2008...2:11 pm

You put the lime in the coconut

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If you are not familiar with Harry Nilsson, I cannot recommend him highly enough as a singer/songwriter within the classic rock genre.  One of the tracks from his brilliant album Nilsson Schmilsson (1971) is called “Coconut.”  In this song a woman gets a bellyache from putting the lime in the coconut and drinking them both up.  She calls the doctor (probably a witch doctor) and he prescribes she should take the lime in the coconut and drink them both together in order to  order to cure the bellyache caused by taking the lime and the coconut and drinking them both up.

This is clearly insanity.

Nilsson’s song humorously reveals and illustrates an interesting aspect of human nature that is widely applicable.  When you misdiagnose a problem, and you treat the symptoms rather than the cause, you may believe that the solution is more of what actually caused the problem.

With regard to the current financial turmoil, all of the government monetary policy witch doctors are prescribing more artificial liquidity injected by the Federal Reserve.  The present bust was caused by Greenspan’s insane expansion of the money supply starting in 2001 in an attempt to artificially create a boom (which in itself was to try to fix a bust caused by a previous artificial boom to fix a previous bust, and so on back to the artificial boom created by the establishment of the Federal Reserve in 1913).  Note in these cycles that the booms are artificially created by monetary policy fiat and the busts are market’s natural corrections to the bad economic decisions that were made during these booms by those who didn’t know what was going on.  The busts bring you back to reality.  In all of these cases, the expansionary monetary policy causes the boom-bust cycle.  When a bust happens, politicians try to fix the problem by printing more money and throwing it at the problem.  (Of course, they don’t make it look that simple or people might realize that’s what they’re doing and ask questions.  There’s a very intricate sleight of hand procedure involving the Federal Reserve, the U.S. Treasury, and the banks to print this money.)  This idea that you can save the economy by using the same procedures that destroyed the economy is what I will henceforth call “Lime-in-the-Coconut Economics.”  Maybe it will become as famous as “Reaganomics” or “trickle-down economics.”  A competent medical doctor like Ron Paul knows that this diagnosis of our present economic crisis is hogwash.

Those involved in this process are either woefully ignorant of economics, blinded by ideology, or diabolically evil.

Most people fall into the first category.  This would include President Bush, most members of the House and Senate, petty bureaucrats, and just about any voter who has received no economic education outside of a government school.

The second category is comprised of devout adherents to that flat earth society known as the Keynesian school of economics.  This would include most government school economics teachers, college economics professors, and monetary policy makers.  They believe that if we can only engineer the right balance between growth and inflation, and regulate things enough we will enter into a utopian Golden Age.  One comfort that you can take away from this crash and burn of the economy, it is that the Triune God is not mocked and he has a way for dealing with false messiahs, by demonstrating the futility of their idols.  Get your popcorn ready!

The final category is a small group of elite, brilliant, unspeakably evil people.  These are the people who know exactly what is going on and advocate these policies anyway for their own benefit.  I could only speculate as to who is actually in this group today, so it would be irresponsible to name names without hard evidence.  For a thorough examination of the history of some of the people in this third group from the beginning of the previous century, I highly recommend The Creature from Jekyll Island by G. Edward Griffin.  It should be noted that the members of this group are only human.  They aren’t seven feet tall with the ability to consume us with fireballs from their eyes and bolts of lightning from their…  Well, you get the picture.  God is sovereign and they are not.  Some of them will be brought to ruin in this life, the rest on the day of judgment.


  • Outstanding analysis! I love your tag, “Put the lime in the coconut economics”. That is a moniker that should stick. I am sending out a link to this via email to everyone on my list. You state things so plainly that the point can hardly be missed. Yet it seems about everyone I know is missing the point. Maybe if they see this, then the simple truth will sink in.

    Thanks for the excellent post!


  • Roger,

    Thank you for your kind comments. Glad to be of service.

  • People’s high trust in government in the United States is difficult to understand. I cannot fathom why people think giving power and money (a.k.a. more power) to the government is a good, noble, and patriotic deed. Simply put, the government is full of corruption, greed, and the insatiable drive for greater power. Those things are not limited to Wall Street, and, in fact, I would wager they far worse in Washington. It is crazy that people allow Washington to keep our eyes on those greedy louses who keep our 401Ks growing instead of on Washington which is filled with those greedy louses who build nothing but debt for us and shrink our 401Ks by messing with the economy. Stupid politicians. Remember the days when being a Senator was a part-time job?

  • Hi Kathy! Thank you for reading.

    I’m too young to remember the days when being a Senator was a part time job (as I’m sure you are too). I’ve read about it in books, though.

    The government and many of the insiders of Wall Street (especially the banking industry) are in this together. The banks print the money to finance the government’s debt and then use it as “reserves” to create more money out of nothing, loan it, and collect interest on it, with the knowledge that if they ever get into trouble, the government will impute their losses to the taxpayer.

    There are a couple of terms that could generally be used to describe a normal person who thought of such a scheme. “Multiple felon” and “white-collar criminal” come to mind.

  • […] love the portrayal of Keynesian “Lime-in-the-Coconut Economics” as binge drinking followed by a […]

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