The fallacy of Economic Plans

Robert Shiller could be right, but I would not want to live in his World. His is a World where the economy must be a hand-fed child, and what must be delivered is a harsh-tasting medicine of dubious nature. I do not want to psych out my fellow man, and I don’t like ‘priming the pump’ where fellow travelers cannot see the worth of the effort. I least like the business of convincing hard businessmen that there is profitable advantage, when no one but the Espouser can see it; it all reminds of Madoff and his ilk. I do not like a economic system where only a Few can spot an advantage, and who avow that normal Danger signs should be ignored. It might just be me with it being Tax Day, but it scares me that the current Administration and Fed leadership all sound like Robert Shiller. It reminds me of the old Saw that Protection was unnecessary, as pregnancy was the unlikely Outcome. We don’t need Cheerleaders to encourage economic recovery, or a repetition of the old slogan of ‘Go, Team, Go!!’; what We need are at least some salutary benefits from expenditure of the funds, even if the economic encouragement fails.

Tyler Cowen adopts much the same position as myself, though he approaches the Problem on a different level. Massive fiscal policies remain somewhat debatable as to effect, and places a huge amount of economic assets on an Outcome which is only one of a various assortment of Outcomes. It is discouraging that We are discussing major investment where there has only been One truly significant previous use, and which success is still widely debated 70-80 years after its use. I am reminded of the Roman Empire (don’t Kids hate that I once studied the Roman Empire) which used ‘Bread and Circuses’ along with massive Construction, but the Empire slowly degraded over Time. We Talk and Spend much today, but like the aforementioned Empire, do not get all that much done. I once thought to write a Paper on how the Roman Empire was destroyed by Inflation due to the wastage of funds by the Imperium, but like most things I contemplate; came to the conclusion that no one wanted to read it anyway.

Maybe it is only because it is Tax Day, but it seems like a lot of uncertainty has entered the Blog World today. Mark Thoma even joins the ranks of Those doubting the means by which systemic risk is judged in the economy today, whether in the American economy or the World. I do not believe in regulatory action, thinking there are two types in economics; the fearful, and the hawkers of wildcat schemes. The Fearfull will always think that the scope of economic activity can be limited to success-proven venues, and the Hawkers are always looking for the Escape mechanism where they can avoid the limitations of resource and collateral. Both Types base their economic suppositions on false premises that their management will contain the economic structure. It is probably the rationale for the ‘Boom or Bust’ Cycle in the first place: artificial conversions which will never Work over the long-run. I have even depressed myself, so it is time to quit! lgl