Grand Theft Society

A core problem with government is that its managers believe that all reality will conform to their wishes if they issue the right orders, pass the right laws, and put the right people in charge. Reality resists this simple-minded approach; witness the debacle of the war on terror. Sadly, the same group that has managed that war is now managing another one: the war on recession.

The tendency of these managers is to fabricate a view of cause and effect that conforms to what they would like to do. In the war on terror, we were told that the 9-11 attacks came about because shadowy bad guys from afar resent our freedom. If you believe that, the answer is more militarism and killing as a preventative measure. If, however, you realize that these attacks grew out of a desire for vengeance against American military policies, the implied policy solution looks radically different.

So it is with the economy and the proper policy response to recession. If you believe that there is no good reason for an economic downturn other than a wave of animal spirits and flagging public confidence, your response is to inject optimism via the printing press. Surely, nothing makes folks happier, temporarily, than for them to find themselves awash in newly printed bills. This will lead to internal joy, consumer spending, and thus recovery.

So believes the silly political class.

Consider a different view of cause and effect. If the recession is a correction to an overly pumped economic boom, matters change. The recession, then, is not an aberration crying out for correction; it is itself the correction for the unsustainable economic bubble that preceded it. It should be welcomed in the same way we welcome a sober day after a drunken evening, or the detoxification of an addict after a period of addiction.

Continue reading Grand Theft Society by Lew Rockwell

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