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The Twilight of the Educated Gods Mixing up Mamet, Hayek, Hitchens, and Sowell

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Baby Economics

by Christopher Chantrill
June 20, 2011 at 2:44 pm


ECONOMICS is too hard. Who can tell from deficits and multipliers, after all? So it is time to dumb economics down, and make it simple enough for a baby to understand. “Economics for Babies.” This could be a publishing sensation to equal the Dummies phenomenon. Here is how it works.

Drill, Baby, Drill. Our liberal friends are convinced, because their tame climate scientists have told them so, that conventional energy sources are either doomed, as in Peak Oil, or evil, as in coal and nuclear energy. It’s a pity that horizontal fracturing is making monkeys out of the Peak Oil chappies. The only way to approach energy is to let the Rockefellers and the Fricks and the Texans and the Albertans and the North Dakotans go for it. If they make a mess—and they will—then we will make ’em clean it up.

Cut, Baby, Cut. Our liberal friends are convinced that, given sufficiently rigorous policy analysis and sufficiently inspired political leadership, they can design and build the bridge to the future with government programs. But the truth is that government spending, all government spending, is a waste, starting with the Pentagon and defense spending. But, wasteful as they are, some government programs are necessary. Alexander Hamilton laid out the case for a national defense in the early Federalist Papers. Almost all other government programs are pure waste; their only purpose is to buy votes for politicians with your money. Alas, they do more than that: they fray the cords of community. When people have to work together in voluntary cooperation to secure retirement income, health care, and education, they build community. When the government does it, the people fall to squabbling and grabbing their piece of the pie. So the only thing to do with government is to cut.

Grow, Baby, Grow. Our liberal friends are convinced that government must invest in the infrastructure to build “public goods.” That is the rationale behind President Obama’s crazed push for very fast trains, clean green energy, and the rest of the liberal crony capitalist agenda. But almost all “big ideas” for government investment have ended in tears, from government credit allocation to government energy policy. There’s a very simple reason for this. Politicians are experts in winning elections, and businessmen are experts in growing the economy. Politicians should stick to politics, and let businessmen get on with business. Come on liberals: we all know how to grow the economy. You do it will low tax rates on people and low taxes on jobs.

Debt, Baby, Debt. What is it about the national debt? Under Alexander Hamilton the US national debt ignited an economic boom. Under President Obama it has sent the economy on a Recovery to Nowhere. How come Hamilton was so smart? It’s simple. He stole his financial system from the Dutch. It was the Dutch that invented the modern financial system in about 1600 complete with banks, bond market, stock market, national debt, and a hard-money central bank. It worked so well that the Dutch won their independence from Spain. Then the Brits imported Dutch finance in the Glorious Revolution of 1688 and built a world empire. Alexander Hamilton imported Dutch finance into the US in 1792. Confidence in US credit got so high that President Jefferson could borrow the money to buy Louisiana and enable his successors to conquer a continent. But gambler John Law taught the world how to screw up Dutch finance. He took it to France in 1715, sweet-talked a couple of dukes, turned it into a confidence trick, and destroyed the credit of the French ancien regime. Today we call John Law’s system “stimulus” or “Keynesian economics” and we know where it ends: “sovereign default.” How can you tell sound “Dutch finance” from the inflationism of Keynes and Law? It’s the difference between confidence and confidence trick.

Next year is election year, and patriotic Americans will want to vent their frustration at a failed Obamanomics. What better way could they choose than public recitations of Baby Economics. I suggest that the flash crowds of young Americans chanting “U.S.A.!” in front of the White House upon the death of OBL and also upon the occasion of an LSU leftie trying to burn an American flag might like to blend a little Baby Economics into their chants. For starters, why not warm up with “U.S.A.! Drill, Baby, Drill! U.S.A.!”

Real economics is pretty simple. A baby could understand it. The reason it’s gotten so complicated is that politicians are always trying to game the economy to buy votes. Spend, Baby, Spend!

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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presented by Christopher Chantrill

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