I’m afraid I must be a little short with you today. Not in an angry sort of way, but in a time-limited way as I’m headed out of town for the day.
Where, you ask? (Well, you didn’t, but I’ll tell you anyway.)
I am travelling to another town to pick up a rat terrier, a breed that, despite weighing in at just a few pounds when wet, is actually very good at rodent killing. According to lore, back in the day when the sport of rat baiting was popular among the British rabble, the breed was among the very best at disposing of rats, managing to do away with something like 100 vermin in eight minutes.
They are really quite a noble breed. Hummingbird-fast when speed is called for, but otherwise very happy to lounge around the house.
I used to consider myself a big-dog kind of guy, but over time we’ve been downsizing and with the late General now gone, his replacement will be another rat terrier, all three pounds of him. At this stage, a mere toddler, he will look something like this. But don’t let his cuteness fool you. Were you in possession of a long, hairless tail, you would quickly be dead meat.
It is funny, the things we humans want, eh? Some people want pit bulls, and some people want rat terriers, or an unlimited list of other things we’ve come to believe will somehow enhance our lives.
I was reminded of this fact this past weekend while strolling the docks of a local boat harbour, admiring the hardware on display. To my eye, the majority of the boats seemed non-descript, uninteresting even. Little better than floating logs. Yet, there were dozens of them bobbing in the light waves, each costing a minimum of $20,000, but many upwards of $500,000.
And this tableau is repeated across the waterfront from coast to coast.
And this tableau is repeated across the waterfront from coast to coast.
Few pastimes more clearly reveal the truth that we humans are a dreamy lot. No sooner do we have a few extra dollars in our jeans than our minds begin to wander to what marvellous things we might spend them on. As a child, it might be the shiny, red fire engine with working fire hose on display at the local toy store. As an adult, it might be a Mainship Pilot ’34, Sedan model.
It is this ability to dream that has made the human, not the lion, the real king of the jungle.
In fact, some humans wake up each morning deciding they want the lion’s skin handsomely mounted on a centrally viewed wall and will set forth to have it, even at the cost of $100,000 a week on the African savannah with a qualified Masai tracker.
The socialists among us – the rolls of which swell during periods of crisis – raise their voices in disgust at such wasteful excess. Which, to my thinking, proves how little they actually know about human nature and about how the economy actually works.
If you want to see a true economic recovery, then the government – that very sharp, two-edged sword of societal organization – must, first and foremost, step out of the way of humankind so that it might pursue its foolish passions with all the gusto it can muster.
The opposite of that condition is much like the situation today, with the government stepping between the boy and his fire engine by shaking half of the boy’s savings from his piggy bank and, after subtracting a large share for its expenses, passing the balance on to others felt more deserving.
Left with too little to buy the red fire engine, the boy feels frustrated and disheartened. And the snowball begins to roll down the hill from there.
Returning to the boat harbour, the fact that the grown-up can’t afford the boat of his dreams means that the boat won’t ever be built. And that the boat harbour will have one less slip rented. And that the sail maker won’t be selling a sail, nor repairing same when it rips. The waitress at the marina restaurant will have one less customer; several, actually, because humans like to boat with friends. The gasoline salesman will sell less gas to the boater to fuel his car for the trip to the marina or for the back-up engine to be used when the wind dies. The rope makers won’t… well, you get the idea. 
In time, if a sufficient percentage of humans’ excess resources are drained away and redistributed, either through direct taxation or indirectly through inflation, the populace stops dreaming, no new boats are built, and entire industries start shutting down. Meanwhile, the boaters, defeated in their most pressing passion, stay at home sulking and, perhaps, drowning their sorrows in an extra tot or two of the daily rum.
Though the economy doesn’t exactly grind to a halt, it does take on a different tenor – one that is less aspirational and more oriented toward survival. Investment in new enterprises, other than those connected at the hip to the government, falls off sharply and a gray fog settles over the land.
While you may think I am being a bit melodramatic in these assertions, history supports my case. For proof, look no further than the Soviet Union or China before their shift back towards the light of freer enterprise.
All of which is to say that until the current U.S. government relearns the importance of getting out of the way of the citizenry and its many follies, we are on a one-way escalator to the bargain basement, the home of failed dreams.
The sharp-eyed among you may have noticed that I have expressed the view only that the government should step out of the way, and not once suggested it engage in trying to encourage the pursuit of human passions.
The sharp-eyed among you may have noticed that I have expressed the view only that the government should step out of the way, and not once suggested it engage in trying to encourage the pursuit of human passions.
That’s because when the government steps in to help, they create a different form of dislocation in the economy, which ultimately proves just as disastrous. Producing nothing, the government has very few tools available to work with. Coercion, tampering with the money supply, and temporarily manipulating interest rates, among others. It is the latter, forcing interest rates lower, that would typically be used to encourage the population in pursuing its dreams. No question about it, when you wave a low-cost, low-credit requirement loan in front of a human, his passions will overwhelm his fiscal sensibilities. And the next thing you know we have technical bankrupts sitting in empty McMansions or boats they can’t afford, contemplating the worst.
So, what are the U.S. government’s policies now, almost three years into the crisis?
An article on Bloomberg this morning shone some clear light on that topic. Some excerpts…
Oct. 6 (Bloomberg) -- President Barack Obama is considering a mix of spending programs and tax cuts to respond to widening job losses that would amount to an additional economic stimulus without carrying that label.
The discussion of the initiatives, including a boost in transportation spending and an extension of an expiring tax credit for first-time homebuyers, comes as the White House is balancing rising concern about unemployment and a budget deficit the Congressional Budget Office estimates will total $1.6 trillion for 2009, and $1.4 trillion in 2010.
Administration officials have told allies in Congress that a broader transportation bill, and extensions of a homebuyer tax credit and unemployment benefits are all on the table, a Senate aide said.
…In considering the measures, the administration has to reconcile two potentially contradictory missions: combating rising unemployment through government intervention and the need to hold deficits down.
White House Press Secretary Robert Gibbs yesterday highlighted those political sensitivities, saying there “were no plans” for a second stimulus like the $787 billion package passed earlier this year. Instead, he said, the administration is looking at “extensions” of existing programs.
“The economic team is certainly looking at and working on any way that we can create more jobs,” Gibbs said.
“The economic team is certainly looking at and working on any way that we can create more jobs,” Gibbs said.
Now, let’s take just a minute to examine the messages being sent by the administration. On the one hand, there is a recognition of the rock and the hard place the government has put itself in. In response, it claims to consider a combination of new spending programs – apparently to be directed at infrastructure improvements (the same script we heard before) – and “tax cuts.” But the tax cuts are anything but… they are tax credits. Which is to say, yet more spending. And rather than come right out and ask for more stimulus, for which they say they have “no plans,” they turn right around and say they are looking at providing “extensions” of existing programs. As if continuing to spend on existing programs is in any way different than spending on new plans.
Does the administration really think the public is too stupid to miss that point? If so, then they should take a look at the price of gold, which is rapidly closing in on its all-time record.
In the final analysis, or at least for today, people want what they want and need absolutely no encouragement to roll up their sleeves and put in a hard day’s work in order to pursue the object of their desire.
In the final analysis, or at least for today, people want what they want and need absolutely no encouragement to roll up their sleeves and put in a hard day’s work in order to pursue the object of their desire.
Unfortunately, standing in their way are other people, socialists and those in government, for example, who look to fulfill their own aspirations by parasitically living off the labor of others.
The extent to which they are in a position to forcibly take what they want through taxation and other forms of wealth distribution is the extent that the economy suffers.
In time, it will lead to social conflict, as frustration grows among the productive classes who just want to be left alone to pursue life, liberty, and happiness in entirely personal and often frivolous ways.
The extent to which they are in a position to forcibly take what they want through taxation and other forms of wealth distribution is the extent that the economy suffers.
In time, it will lead to social conflict, as frustration grows among the productive classes who just want to be left alone to pursue life, liberty, and happiness in entirely personal and often frivolous ways.
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