There will be a financial meltdown because the present course is unsustainable. As Herb Stein, former chairman of the president’s Council of Economic Advisers, told us half a century ago, “If something cannot continue, it won’t.” The underlying cause of the meltdown is not a global conspiracy but the result of ignorance and the unwillingness of policymakers and others to acknowledge reality. More on this below.

Last week, we were treated to the admission from Dr. Anthony Fauci that he just made up the 6-foot distancing rule and that it had no scientific basis. An innocent quip — except when you are the director of the National Institute of Allergy and Infectious Diseases. This and other unscientific (and frequently wrong) statements from Dr. Fauci and other high-ranking government health experts resulted in the unnecessary shutdown of thousands of schools, as well as restaurants and other businesses. Children lost critical years of learning, which will hurt them for the rest of their lives. Trillions of dollars of gross domestic product were lost, making most people poorer than they would have been.

Most of the key COVID players failed to admit their ignorance and became part of an attempted cover-up. Likewise, the climate debate involves an ongoing attempted conspiracy to cover up the ignorance and degree of enrichment (largely at taxpayer and consumer expense) enjoyed by the professional climate alarmists.

Former President Donald Trump was subjected to an attempted conspiracy by people associated with the Hillary Clinton presidential campaign and the intelligence and federal law enforcement communities, resulting in the so-called Russia hoax. Once again, he is under attack by politically motivated prosecutors such as Letitia James, New York attorney general, and Fani Willis, district attorney of Fulton County, Georgia, both of whom appear to have engaged in prosecutorial misconduct. Some of the legal attacks on Mr. Trump are so over the top that they appear to be nothing more than election interference; they discredit attempts to hold him accountable for real crimes he may or may not have committed. These conspiratorial efforts will eventually be revealed and fall apart because of the complexity of the effort, the incompetence of the participants, and the inability of the players to remain silent.

The U.S. and many other countries are facing a financial crisis stemming from the continuing issue of debt at levels that cannot be serviced without doing great economic harm. Greece and Argentina are recent examples of countries that are going through economic meltdowns where the citizens are poorer than they used to be.

Take it as a given that the U.S. and others are on an unsustainable course, and where the elected officials will not act, for a variety of reasons, to correct the situation before the meltdown occurs. The following questions then arise:

(1) When will the meltdown start?

(2) How quickly will it occur?

(3) Who will be the biggest losers?

(4) Who will be the winners?

In any financial crisis, most people suffer, but there are always a few who benefit. Will the beneficiaries be people who are more knowledgeable, connected, or just plain lucky? Of those who come out ahead, to what extent did they or their allies engineer the crisis, or did they merely take advantage of what they correctly foresaw?

Those who see the crisis coming will seek to reduce their own risk by seeking to shift it to others, often by using government. The various deposit and other financial instrument risk-insurance programs are examples. “Too big to fail” financial institutions with political clout lobby for changes in laws to make it easier for them to pick up the assets of distressed institutions at fire sale prices. This is evidenced by the seemingly never-ending consolidation of financial institutions into fewer but much bigger entities. The legal changes that the major financial institutions lobby for tend to weaken the property rights of individual savers and investors and shift them to the larger institutions.

There is considerable debate about whether or not this phenomenon is merely the result of the well positioned to take individual actions to protect themselves and institutions, or a grand global conspiracy of a few to gain more control of the world’s assets. If it is the latter, why do we not know their names, where and when they meet, etc.?

It is my view that the phenomenon of increased financial consolidation and risk shifting is the natural result of the more informed and astute people in many different financial institutions and many different countries taking action to protect themselves and their institutions. This involves tens of thousands of people globally who do not know one another but operate through price signals in the global market — in a way that Adam Smith would have understood when he published “The Wealth of Nations” in 1776.

I come to this conclusion as an economist who has been fortunate and very lucky to work with and know many country and financial leaders over the last several decades (the top of the pyramid). As smart and as knowledgeable as they are, they are not capable of running a global conspiracy — due to the complexity of the task and the degree of secrecy that would be required.

• Richard W. Rahn is chairman of the Institute for Global Economic Growth and MCon LLC.

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