I am so naive. I let myself think it was possible. That for all the smart people on LinkedIn, I thought an article like this one might be grounded in rational thought about the way the world works. But alas it is just more rant fodder. Perhaps I am an even bigger fool for following up on it.
This is how soft I am getting. I let Mr. Macafee and Mr. Brynjolfsson lead me by the nose all the way into the fourth paragraph; something a progressive Keynesian should never be allowed to do. “But wait!”, I thought, he was beginning to wax Austrian about the virtue of supply when he contrasted destruction with the mention of [job] “creation”. Like the thunderous down stroke of an electric guitar after a long, soft intro in an eighties power ballad he was going to school the demand-sided intelligentsia, I thought. Yes, for once, a reprieve from the endless crowing of Paul Krugman, Robert Reich and their ilk was on its way like the beach sun after a long winter, I fantasized! And just like the last half of a hand held sparkler on a hot fourth of July night, it was over. All that was left of my optimism was a few seconds of retina burn.
Actually it’s worse that that. I didn’t feel the set up until even later. He makes it all the way into his sixth paragraph with fair-minded comments about the deceptive nature of unemployment statistics before finally firing the ignition switch on his propaganda pump. But once it was on, man was it flowing with torrential commitment.
Is greed more efficient than folly?
The mysterious and elusive upside to cost shifting
From here the post authors waste no time getting to the sales pitch. What we need to stop middle aged white folks from ending it all is another giant round of government stimulus. Put the rednecks to work building government funded bridges and roads, they say. Never mind the fact that the window dressing portion of the last trillion dollar stimulus devoted to “shovel ready” jobs was a no show and a net loss. Forget that, at best, the vast majority of the last stimulus in 2008 and 2009 resulted in a bunch of money getting moved around i.e. forcibly removed from the hands of would be investors to state coffers used to reduce debt spending; not very stimulating. All of this also done at a net loss laden with a nice glaze of Solyndra fraud. But what’s half a billion dollars of theft when you’re wasting a trillion? Progress! Forward! Get the sense of being mushed? Pay no attention, they say.
Federal stimulus spending is the economic equivalent of perpetual motion. Actually, no, it’s worse. Because stimulus via federal spending is such a Rube Goldberg often infused with activist justice no one pays attention to the actual results but instead demand more! Nobody wants to discuss how human behavior won’t follow with the sentient stupidity of lemmings no matter the Grubering the central planners contrive upon us.
But the worst effect of all is price distortion. A free market depends on the signal fidelity of pricing in order to function and artificial stimulus serves only to distort it. This results in bubbles and the eventual shock of their bursting. The actual market price of a product is supposed to reliably indicate the state of supply of it. And free of government meddling it usually does. A high price of fuel suggests that supply is low or demand high, either way the product is dear, and consumption should slow to avoid a shortage. Messing with pricing signals through import tariffs, agriculture subsidies, EITC, no-bid contracts, cash for clunkers etc. is like rewiring a traffic signal to show green in all directions. If only the consequences could be so immediately and undeniable tied to their cause. Oh, and just so I don’t offend by ignoring their sincerest justification of more stimulus: the winged unicorn of green energy will save us all. All you need is a congress willing to kill the supply of coal, oil and gas causing the price of fossil energy to soar past the production cost of wind and solar and your utopian fantasy is achieved. Figure out how to accomplish this without endenturing me and knock yourself out.