Jun 03 2010

Steyn: We’re too broke to be this stupid

If anyone is counting, this is the 1200th post on this blog.  Or so says the WordPress editor.

I hate to quote only an excerpt of this piece by Mark Steyn, titled We’re too broke to be this stupid.

Back in 2008, when I was fulminating against multiculturalism on a more or less weekly basis, a reader wrote to advise me to lighten up, on the grounds that “we’re rich enough to afford to be stupid.”

Two years later, we’re a lot less rich. In fact, many Western nations are, in any objective sense, insolvent. Hence last week’s column, on the EU’s decision to toss a trillion dollars into the great sucking maw of Greece’s public-sector kleptocracy. It no longer matters whether you’re intellectually in favour of European-style social democracy: simply as a practical matter, it’s unaffordable.
… the easiest “solution” to <social problems of all kinds> is to throw public money at <them>. You know how it is when you’re at the mall and someone rattles a collection box under your nose and you’re not sure where it’s going but it’s probably for Darfur or Rwanda or Hoogivsastan. Whatever. You’re dropping a buck or two in the tin for the privilege of not having to think about it. For the more ideologically committed, there’s always the awareness-raising rock concert: it’s something to do with Bono and debt forgiveness, whatever that means, but let’s face it, going to the park for eight hours of celebrity caterwauling beats having to wrap your head around Afro-Marxist economics. The modern welfare state operates on the same principle: since the Second World War, the hard-working middle classes have transferred historically unprecedented amounts of money to the unproductive sector in order not to have to think about it. But so what? We were rich enough that we could afford to be stupid.

The reason I hated to quote only the excerpt is because you should really read it all.

Steyn goes on to make the case that a great deal that is publicly funded, with taxes extracted from average working people, is counterproductive, or at least subsidizes bad behavior.  He is at his usual entertaining and trenchant best.  Read it all at the link above.

What it boils down to is this:  trying to repeal the laws of economics is a luxury for societies with lots of extra cash laying about.  That is no longer the case in pretty much any society, and certainly not in western society.   It’s a bit like pretending you’ve undone the laws of thermodynamics by injecting extra energy from outside the system, so that you can try to convince people that entropy isn’t really happening. 

But there are some laws of economics that apply.  Here are a few:

1)  You will get more of anything you subsidize.
2)  If you increase demand, and don’t increase supply, prices go up.
3)  If you increase demand, and don’t increase supply, and don’t let prices go up, shortages and rationing come next.
4)  If you decrease supply, and don’t decrease demand, prices go up.
5)  If you decrease supply, and don’t decrease demand, and don’t let prices go up, shortages and rationing come next.
6)  If you spend money on things that don’t lead to the production of more money than you spent, then you’re losing money.
7)  Ponzi schemes always collapse eventually, usually sooner than the con artists hoped.

It may not be clear to you, but virtually EVERY regulation has the effect of decreasing supply, and so prices go up.  So we had better have a minimum of regulation, sticking to only the absolutely necessary.  Keep in mind that rich people who own businesses don’t pay high prices.  They just pass them on to consumers.  When they reach a point where they can no longer pass higher prices on to consumers (because consumers won’t pay it, or the government won’t let them raise prices themselves, regardless of their costs), they leave the business, since that means it’s no longer making money.

The single biggest Ponzi scheme in American history is Social Security.  The next biggest is Medicare.  If you aren’t already collecting benefits from one of them, you aren’t going to get nearly as much from them as did your predecessors.  Your children will get FAR less than that.  Check the economies of Greece and Spain for details.

The “tea parties” springing up around the country are evidence that the entire electorate has not lost its mind, but part of the electorate is clearly insane.  Or suicidal, which may be the same thing.

The 2008 election was a prime example of hope (and apparently faith in the tooth fairy) triumphing over clear thinking based on facts and history.

As Dallas Willard says in Knowing Christ Today, people only know what they’re willing to know.  So I suppose that putting this together with Mark Steyn’s observation that “we’re too broke to be this stupid,” we can say that we’re too broke to be willfully stupid.

We’re too broke to decide we just don’t want to know how we got that way.

I think some people are beginning to catch on, finally.  Pray it isn’t too late.