The Oil Market Panic

Fred:  Gas prices are going up. The oil companies are gouging us.
Mike:  Iran's desire for nuclear weapons is shaking up the Middle East. Oil companies are just mice among the elephants.

Fred:  Well, the government should limit the price.
Mike:  Do you want shortages, rationing, and two-hour lines at $3.00 per gallon, or to adapt in your own way at $4.50 per gallon? You are going to use less gas either way.

The Oil Market Panic
02/20/12 - Hoover.org by Richard A. Epstein

[edited and paraphrased]:  The rise in oil prices traces to a renegade Iran. The West sees that the Iranian nuclear threat is not just bluster. Iran poses far greater risks to world peace and the political order than even a major disruption in oil supplies.

An anxious West is making a concerted, effective effort to cut off Iran from the world’s banking system and to block the international use of Iranian oil. The Saudis have helped the West by expanding their shipments into world markets. One-third of world oil travels through the Strait of Hormuz. The Iranian threat to close the Strait and the movement of the U.S. aircraft carrier Abraham Lincoln into the Strait are serious.

These developments have driven the price of North Sea Brent crude oil to around $119 per barrel, a potential gasoline price of $4.25 per gallon. Ordinary Americans are being forced to tighten their belts. The best response is to allow this free-market adaptation to reality. A worse response is for the government to undermine the market by capping price increases or dictating its vision of the right price.

Any system of government subsidies or controls will disrupt the vital market process of continuous adaptation. It will also cost a fortune. The “hands off” motto of laissez-faire capitalism has never been more pertinent than in this oil crisis. Government interference in the market will make the effects worse.

Leading political figures on both sides have responded sophomorically. Their shared, incorrect premise is that price changes are evidence of a market failure, and this justifies intervention. It doesn't. Price increases should not lead to a call for price limits.

The real problem is the trouble brewing in Iran and the Strait of Hormuz. Politicians should neither panic nor pander. Their political energies are needed to reach a diplomatic or military solution for a serious international breakdown that requires our urgent and unified national attention.

Hating Lottery Winners

Max:  Big companies are making obscene profits. Those lucky bastards should be paying their windfall profits back into the government, to help me.
Fred:  Yeah, and let's get back more money from those lucky bastard lottery winners.

Max:  Uh, I don't think you see the point.
Fred:  I thought the point was that no one should be lucky.

Why should businessmen be disliked and pay high taxes because their success is partly luck, while all-luck lottery winners are generally accepted as deserving their winnings?

Lotteries are a bad bet

Lotteries return only 60% of what is bet, and only 18-30% in the big prizes. Many people with a social conscience hate lotteries because they are designed to take money from people without much money, and states promote this scam on the people.

The following explains nicely the odds against winning anything and gives the social argument.

I hate the lottery  -  10/10/2010  -  Graham Templeton

[edited excerpts]  What kind of government runs a crooked game on its citizens? Well, it appears that is the Government of Canada.

The odds of hitting the jackpot on the Lotto 6/49 are about 1 in 64 million. Some unkind fellows have referred to this as a “stupidity tax,” arguing that if the players are dumb enough to take such a fool’s bet, they deserve the resultant siphoning off of their finances.

In some circumstances, I would be okay with that. Freedom costs money sometimes. But, rugged individualists refer to the right of a citizen to run a successful business. That argument does not apply to the government, which should not play on the mathematical illiteracy of its population.

This government runs massive ad campaigns to convince you to throw your money away on the lottery. But it won’t let you start a casino because gambling is bad for the community. Lottery rackets have been highly illegal, and they still are, unless you’re the government.

The government restricts our freedom, moralizing at us, and empowering itself to make our financial decisions for us. But, it plays commercials for its own brand of cocaine, while telling us to Just Say No to other brands.

Lottery winners and businessmen ...

Lottery winners are OK

Many people don't like the lottery because it doesn't pay enough or because the winnings are taxed. Almost no one hates lottery winners. I Googled "hate lottery winners" and found just one post hating a particular winner.

I hate lotto winners  - 07/06/10  -  Bun Boy Eats LA

[edited]  This woman with a stupid name just won a multi-million dollar lottery. For the 4th time with a friggin’ scratch ticket!!!

That’s just not right. I don’t believe in the lottery, I think it’s obnoxious. I think it’s worse than Miley Cyrus’s gummy smile. I don’t believe in getting ones’ hopes up that high. No one with teeth and a desire to own outside of a trailer park ever wins.

Yes, I’m jealous. Jealous that Joan Stupidface will get to add a wing to her tacky, faux finish Vegas crack den and procure a few dozen more mangy cats to poop in all the corners.

This is why I LOVE to watch programs such as “Curse of the Lottery!”

The complaint is that few lottery winners are admirable. Even so, there is no sentiment to take away most of their winnings through special taxes. The feeling is "they took their chances and won". Canada doesn't tax lottery winnings. That shows public support for the winners to keep all of their lucky gains.

Businessmen are Not OK

Businessmen (or women) play a type of productive lottery. They use their own money (and money from voluntary investors) to produce goods and services which people want to buy. This involves much planning, skill, and persistence, with a component of luck.

Some people seem to live in a sunbeam, creating a profitable business despite character flaws. Some people fail despite the best planning. Most businesses achieve a middle success, and some find super success, making millions and even billions.

The odd part is that successful businessmen are often disliked, especially for their success. A common sentiment is that they should pay more and more taxes because they were partly lucky, and so should give back most of their gains to the rest of us.

This sentiment is common even though these businesses add to the well being of customers and workers. A lottery only moves money from some people to others, giving the state a big cut along the way. A business creates well-being at the expense of no one, actually helping people, and paying taxes along the way.

If successful people and businesses are disliked and are supposed to pay for the rest of us, then why aren't lottery winners even more disliked? There is some luck in business, but the lottery is all luck. If we dislike businessmen who are somewhat lucky in the course of delivering goods and services, then why don't we despise lottery winners, who have done nothing more than pay for a ticket?

There is nothing to dislike about businessmen or lottery winners. They each put their resources toward a strategy for success. Many of both lose their investment. Of the two, the businessmen and investors should be admired for creating good things along the way. We shouldn't be grabbing at their winnings.

An Intellectual Program

Intellectual:  We must adopt policies ... any normative concept of a just society. [applause]

Mike:  He must have a great mind. I didn't understand much of what he said, but I find myself agreeing with him.
Jim:  He's not so great. Either he is intentionally confusing, or he can't figure out how to explain it to us.

02/15/07 - Elsewhere.Org

The following is an excerpt of a significant article. Don't spend time diving into the complexity, just get a feel for it.

The Rubicon of Reality:
Precultural Socialism, Socialism and Neomaterial Capitalist Theory

By Henry Wilsonaka the computer program Pomo, Department of Deconstruction, University of North Carolina

1. Consensuses of fatal flaw

In the works of Gibson, a predominant concept is the concept of textual art. It could be said that Baudrillard promotes the use of neostructuralist constructive theory to deconstruct capitalism. The subject is contextualised into a predialectic paradigm of expression that includes narrativity as a reality.

“Sexual identity is part of the meaninglessness of truth,” says Foucault; however, according to Cameron [1] , it is not so much sexual identity that is part of the meaninglessness of truth, but rather the rubicon, and subsequent stasis, of sexual identity. Therefore, Bataille’s model of textual nationalism holds that the raison d’etre of the writer is significant form. The characteristic theme of Prinn’s [2] critique of semiotic neotextual theory is the difference between class and society.

This article and about 5,400,000 others are significant because they were generated by the computer program Postmodernism Generator. It starts with a collection of authors and quotes, and writes them out in grammatical forms without knowing any meanings. It produces high class, random gibberish, allowing the reader to supply his own meanings and puzzle about the deep and intricate ideas which might lie within.

This is a neat trick. Even if you were fooled, you might think that true intellectuals would not be.

The parody paper ...

Alan Sokal is Professor of Physics at New York University. He wrote an article Transgressing the Boundaries: Toward a Transformative Hermeneutics of Quantum Gravity and submitted it to the journal Social Text, which accepted and published it in its Spring/Summer edition of 1996.

A few months later, Sokal explained that this paper was a parody.

Social Text describes itself: Social Text covers a broad spectrum of social and cultural phenomena, applying the latest interpretive methods to the world at large. A daring and controversial leader in the field of cultural studies, the journal consistently focuses attention on questions of gender, sexuality, race, and the environment, publishing key works by the most influential social and cultural theorists.

A Physicist Experiments with Cultural Studies

[edited]  I tried a modest, uncontrolled experiment to test intellectual standards. Social Text is a leading North American journal of cultural studies. Its editorial board includes luminaries such as Fredric Jameson and Andrew Ross. Would it publish an article liberally salted with nonsense which sounded good and flattered the editors' ideological preconceptions? The answer, unfortunately, is yes.

Could the editors really not have realized that my article was written as a parody? Is it now dogma in Cultural Studies that there exists no external world? Or, that there exists an external world, but science obtains no knowledge of it?

In the second paragraph, without the slightest evidence or argument, I declare that "physical reality" is at bottom a social and linguistic construct. Not our theories of physical reality, mind you, but the reality itself. Fair enough: anyone who believes that the laws of physics are mere social conventions is invited to try transgressing those conventions from the 21st floor windows of my apartment.

I wrote the article so that any competent physicist, mathematician, or even undergraduate physics or math major would realize that it is a spoof. Evidently, the editors of Social Text felt comfortable publishing an article on quantum physics without bothering to consult anyone knowledgeable in the subject.

The fundamental silliness of my article lies in its dubious central thesis and the "reasoning" used to support it. Quantum gravity is a speculative theory of space and time applying to distances of a million billion billion billion'th of a centimeter. I claim that it has profound Progressive political implications.

I support this as follows. First, I quote some controversial philosophical pronouncements of the physicists Heisenberg and Bohr, and assert without argument that quantum physics is profoundly consonant with "postmodernist epistemology". Next, I assemble a pastiche of Derrida and general relativity, Lacan and topology, and Irigaray and quantum gravity, held together by vague rhetoric about "nonlinearity", "flux", and "interconnectedness". Finally, I jump to assert without argument that "postmodern science" has abolished the concept of objective reality.

Nowhere is there anything resembling a logical sequence of thought, only citations of authority, plays on words, strained analogies, and bald assertions.

Alan Sokal's paper was more outrageous than a computer generated one. So, it is amazing that it fooled the editors of Social Text. They didn't understand what they were publishing. They only seemed to care that it supported their political beliefs, no matter what the subject area.

Social Text refused to publish Sokal's explanation of his hoax, as not meeting its editorial standards.

- -
Alan Sokal's articles about the Social Text affair.

Thanks to Bill Quick for the link at Daily Pundit.

Workers Pay Unemployment Insurance

Max:  I'm going to take the summer off on unemployment.
Fred:  Have fun on my nickel.
Max:  Lighten up. The company will be paying through unemployment insurance.
Fred:  My wage is lower because of that cost, and I need to keep working.
Max:  Aren't you the busy bee.

About Unemployment Insurance
12/04/11 - The Money Illusion by Scott Sumner
  Via  Cafe Hayek

[edited]:  The statistical evidence on UI is overwhelming significant. When UI benefits maxed out at 26 weeks, there was a spike in the number re-employed right after the benefits ran out.

That might be efficient if due to the income effect. But, it is hard to dispute that UI insurance affects labor supply and employment. Studies show those effects even in areas with double digit unemployment.

Many Western European countries such as France saw their natural rates of unemployment rise from around 2% in the 1960s to about 10% in the 1980s. The most plausible explanations have to do with labor market policies.

I comment at Cafe Hayek.

The irony. Employers pay cash wages and incur employment costs which include healthcare, taxes, unemployment insurance, and employment related legal entanglements. The employer correctly sees these employment costs as part of the total cost of employing the worker.

Competition and productivity determine the total which can be spent on a worker, and employment costs determine the cash wage which can be offered. Greater expenses for unemployment insurance mean lowered wages. Companies are writing the checks for unemployment insurance, but workers are paying for that “insurance” through lower wages offered.

People with jobs are paying for the people who supposedly were fired without cause. If they realized that, there would not be much support for giving 99 weeks of compensation to the non-working. At 3-5% of payroll for unemployment insurance, many workers are giving up ten days of paid vacation each year to support the unemployed.

Wall Street Was Not Bailed Out

Occupy:  The bailouts prove Wall Street bribed our government.
Mike:  Wall Street received TARP loans and have paid them back.

Occupy:  So who was bailed out?
Mike:  Hundreds of small banks in every congressional district.

Occupy:  Small banks own the government?
Mike:  In a way. Small banks give political contributions to congressmen. And, hundreds of small bank failures would point blame at government's disastrous housing policies.

Occupy:  Occupy Main Street!
Mike:  Not quite. Try "Occupy Government".

Wall Street Was Not Bailed Out

11/26/11 - Power Line by John Hinderaker

[edited]  In what sense were “Wall Street banks” bailed out? They weren’t in fact “given” any of our money. Most of the largest banks (which were perfectly healthy) were forced to take TARP loans so that there would be no stigma attached to the few large unhealthy banks, and the many unhealthy small community and regional banks which were saved by those loans.

Almost all large “Wall Street banks” have repaid their TARP loans with interest and in short order. Three-quarters of TARP went to hundreds of small regional banks, notoriously unstable, particularly from commercial real estate lending. It is exactly those small banks who who remain “bailed out”, who lent recklessly to the real estate developers who built the bubble housing.

Taxpayers will end up paying for the government policies which directed money into housing and to automobile worker's unions. Wall Street made 3% commissions. The rest of the bailouts have gone to Main Street, the 99%.

Insane Budget Savings

Official One:  The CLASS Act was intended to provide long-term care insurance to everyone. I'm sorry to report that we will not be implementing it. It is too expensive.

Official Two:  Even worse, we won't be able to save $86 billion by implementing it.

Mike:  Too expensive, but it was going to save money. Are you nuts?

The Wall Street Journal reports that the US Department of Health and Human Services (HHS) has abandoned a part of ObamaCare.

[edited]:  The CLASS Act was intended to provide long-term care insurance for people who become unable to care for themselves.

HHS has re-examined the program as being too costly over the long run. It stopped implementation and reassigned the staff last month. HHS Secretary Kathleen Sebelius informed Congress that she does not see a viable path forward.

Fire Dog Lake explains more.

[edited]:  The Obama administration always thought that this program would need taxpayer subsidies to operate in the long-term.

Cancelling the CLASS Act forfeits $86 billion in savings [?] in the Affordable Care Act. The CLASS Act was scored by the CBO as providing revenue in the ten-year window of the legislation, because it collected more in premiums than it paid out in the early years.

The CBO is the Congressional Budget Office. "Scoring" is its official determination of the costs and savings of legislation.

US Senator Judd Gregg (R. NH) had amended the law to require that CLASS be self-sustaining for 75 years without taxpayer funds. HHS had to work within those guidelines.

My  ?  above marks a contradiction. CLASS could only be implemented with government subsidies from taxes, but the CBO scores CLASS as saving $86 billion dollars. This contradiction illustrates an insane, dishonest, and immoral budget process. This budget accounting trick is so common that officials and the mainstream press don't give it a thought.

Read more ...

The Wall St Journal  -  The Definition of Insanity
Why Democrats won't repeal a program that everyone in Washington knows is a fraud.

[edited]:  Democrats added CLASS to ObamaCare as a budget gimmick among many. These create an illusion that trillions of dollars of new spending will somehow reduce the deficit [save money].

CLASS was supposed to start in 2012. People who signed up would pay premiums immediately, but could not receive benefits for the first five years. Democrats planned to spend these premiums immediately on other things, as if the future payments to beneficiaries would never come due.

About $86 billion would have accumulated between 2012 - 2021 to help finance the rest of ObamaCare. CLASS would then go broke a few years later. That would be somebody else's problem.

The CBO estimates the revenue and cost of a proposed law over 10 years. This is usually adequate for a fair evaluation. But, social programs have a much longer life. Democrats routinely propose laws which collect money now to fund promises more than 10 years in the future. This shows up as a budget "savings" now, because it ignores promises due after the 10 year window.

Thankfully, Sen. Judd Gregg especially applied a 75 year evaluation period to CLASS. Team Obama could not work around this appeal to reality. Strangely, the zombie of the "savings" scored by the CBO still lives within the fantasy world of 10-year budget accounting.

So, HHS will not implement CLASS because it would cost too much money in reality. But, HHS will not officially kill CLASS because it is tied to a fantasy savings of $86 billion.

Immoral

The budget process is immoral. Democrats have passed programs into law which cannot be funded as advertised. This puts at greater risk any person who relies on them, and it prevents partial solutions from the private market.

A proponent might say "These plans give aid to the needy in the short run. That is good, even if the long run solution will require much larger taxes on everyone, and especially the rich".

I say that such programs involve a growing number of people who will rely on them until the time that they fail. A plan for the future is not "We will do this now, and then we will hope".

Our government (politicians) pretends that it is planning for the long-term, but it uses fraudulent accounting to justify short-term plans which are destined to fail in as little as 10 years.

Long Term Care Insurance

Private long-term care insurance (LTCI) is a variation on life insurance. The insurer enrolls a person who is not already in dire health and charges him a monthly fee (the premium) based on his current health and age. The insurer agrees to pay to him a monthly support payment for as long as he is disabled, after he suffers future ill health or an accident.

Private LTCI applies immediately after the person is accepted. For example, it would pay toward nursing home care after an accident which occurs a few days (or 20 years) after acceptance. No state would approve a plan with a five year waiting period such as CLASS.

LTCI is like fire insurance. Each participant pays in enough each month to pay for the costs of sudden disability for a few unlucky people like him, say from stroke or accident. Each person pays according to his own risk, averaged among people with the same risks as he has.

Note that he is not paying for the care of people who are much older or sicker, in the hope that younger people will pay for him when he is himself older and sicker. Voluntary insurance cannot force him to pay more in order to support people in higher risk categories. An insurer who tried this would find that other companies are charging lower premiums, attracting away new business and the insurer's healthy clients.

- -
CBO:  Social Security Trust Funds
Feb 2011 - Easy Opinions

The accounting fraud in CLASS above is to spend "excess" premiums while ignoring future promises which justified those premiums. Sadly, Social Security is a much larger and more serious fraud of the same type.

There is nothing real in the Social Security and Medicare "trust funds" (or in any US Treasury trust fund). The special Treasury bonds in these "trust funds" are only a political promise to find the money somewhere.

The shortfall is about $66 trillion in today's dollars for the combined promises of Social Security, Medicare, and Medicaid. This is about four times the entire yearly income of everyone in the US. That promise is much more than what is recorded in the trust funds, which is itself only an unfunded promise. The trust fund bonds are a promise, but they don't help to pay for themselves.

The Social Security and Medicare trust funds are only a record of what was collected and then immediately spent for things other than Social Security and Medicare.

Reporters assume incorrectly that something called a "trust fund" must have something valuable in it. These "funds" were created and named by politicians. They only hold IOU's from the Treasury to itself. Call it a reminder of what the Treasury took out of the fund to buy other things and is supposed to put back someday.

Fooling the Future

Government Planner:  Our next stimulus plan is really, really targeted at creating jobs and prosperity.
Mike:  What about the last stimulus plan?

Planner:  That was only sort of, kind of targeted at creating jobs and prosperity. We were distracted.
Mike:  How long will this new stimulus work?

Planner:  For about a year, probably past the next election.
Mike:  Then what?

Planner:  We'll have another stimulus plan ready, to continue the good works of the last two.

Future Economic News:

Federal Reserve Chairman Ben Bernanke has announced that Quantitative Easing Eight combined with Stimulus Six has not achieved the results that "were expected by now-fired Fed analysts". This is despite recent reports of an IRS program to increase tax audits unless "businessmen borrow money and invest in job-creating expansion, like it or not".

Quantitative Easing plus Stimulus is the following strategy:

(1) Increased government purchases and salaries cause increased demand for filing cabinets and restaurant meals. This starts a virtuous cascade of money throughout the society, leading to an explosion of wealth and prosperity.

(2) Small businessmen with "more luck than brains" are fooled into investment and expansion by a six-month, 5% increase in business. They will naturally hire more workers, at least until the six-month government buying spree ends.

"It is mystifying that this plan has yet again failed" said Bernanke. "We have run out of traditional economic levers to pull. Very few businessmen have a degree from Harvard. Yet, manipulating money and credit is failing to fool the other businessmen in any significant way."

"We are now forced to use non-traditional methods. We are making huge ad buys in major markets. Our message is that it is patriotic to lose money, if necessary, by expanding business and hiring workers in the current environment of regulation, taxes, and medical mandates. That is the carrot."

"We accept that business owners are unhappy. We will make it clear just how much more unhappy business owners will be if they don't do what we say. We are fundamentally pro-business. We want businesses to prosper by doing exactly what we tell them to do. One for all and all for one. That is the stick."

Wags have unfairly and mindlessly compared government policy to the South Park cartoon  Underpants Gnomes:
(1) Collect underpants.  (2) ???  (3) Collect huge profits.

(See the video starting from 17:40. Sorry for the 30 second commercial.)

- -
Cause and Effect
EO -> 10/11/11 - Knowledge Problem by Michael Giberson
( Click the link above, then see the further link at the upper right. )
  The oil price increases of the 1970s prompted politicians to raise interest rates in an attempt to control inflation. The economy slowed. Was this because of the oil price increase, or the result of the higher interest rate?
  This seemingly simple economic question is actually hard, with uncertain answers, like most questions about the economy. Motto: We don't really know, but we are willing to guess.

Basic Principle of the New Deal

President:  We will now pivot and act resolutely to overcome the serious problems presented to us in these past months and years.

Reporter:  What is your plan?
President:  We will be resolute in our various policies.

Reporter:  Can you give some examples?
President:  Each problem will be solved as required, with a solution tailored to each situation.

Reporter:  Then, what is your guiding principle?
President:  Our principles will emerge as we solve each problem in turn.

Reporter:  I see. You are a big picture, idea type of leader.
President:  Yes. I would not want to limit our problem solving by committing prematurely to particulars.

"Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning" by Jonah Goldberg   (via Ed Driscoll)

[edited]  Today in 2007, many liberals subscribe to the myth that the New Deal was a coherent, enlightened, unified endeavor encapsulated in the largely meaningless phrase “the Roosevelt legacy”.

This is poppycock. Raymond Moley was FDR’s right-hand man during much of the New Deal:

To look upon these programs as the result of a unified plan was to believe that the accumulation of stuffed snakes, baseball pictures, school flags, old tennis shoes, carpenter’s tools, geometry books, and chemistry sets in a boy’s bedroom could have been put there by an interior decorator.

Alvin Hansen was an influential economic adviser to FDR. He was asked in 1940 whether the basic principle of the New Deal was economically sound, and he responded, “I really do not know what the basic principle of the New Deal is.”

Free Ice Cream Cones

Fred:  You have a nice coffee maker there.
Mike:  It's great. It was expensive, but they gave me a coupon for $40 off which I couldn't pass up.

Fred:  But, you are not smiling.
Mike:  Funny thing. I saw one later, just like it. No coupon, but the base price was even less than I paid in total.

Fred:  Coupons are funny that way.

A political gathering in the US.

Politician on outdoor stage:  May I first say that all of you are the most intelligent, beautiful, clear thinking, generous, patriotic, and deserving people that I have met, along with all of the other great people of your town, city, and state.

Voice in the Crowd:  Yeah, whatever.

Politician:  Unlike my opponent, I want to strengthen government in all of the right ways to help you in this life of woe.

Voice:  What about the debt?

Politician:  "Debt"  is only a bad word for borrowing money. It is money that someone has little use for, which we will invest in our great country for your benefit.

Voice:  What benefit?

Politician:  Ice cream cones.

Voice:  Are you nuts?

Politician:  Which of you wonderful people would like a free ice cream cone?

Voice:  [drowned out]

Crowd:  [clapping]  Me, Us, We do, Yeah, Great.

Politician:  I will arrange for free ice cream cones, as many as you want, and other free stuff. Would you like that?

Voice:  [drowned out]

Crowd:  [loud cheers]  Yay, Yes, You said it, Gimme, I can't wait.

Voice:  [as cheering dies down]  There is no such thing as a free lunch.

Crowd:  [some booing]

Politician:  My friends, the heckler is correct. But we are not talking about lunch. We are talking about free ice cream cones.

Crowd:  [louder cheering]

Voice:  [as cheering dies down]  They will make us all pay more.

Politician:  No, we will make the rich pay. They have lots of money. In these times, when we have fewer ice cream cones than we want, it is only fair that rich people and corporations put in their fair share, much more than they are putting in now.

Voice:  [stands on park bench]  Wait! You all will pay more.

Taxes on companies will appear as higher prices. Taxes on investments will slow company growth. You and your children will have fewer and lower paying jobs.

The politicians always take a big cut. Your retirement funds will not grow as fast, as everyone invests less. The same corrupt politicians who promise to tax the rich will make deals with the rich and pass the costs onto you.

This has always been the result of promising free stuff and promising to tax the rich.  [he shouts louder]  You are being asked to vote away your own prosperity!

Crowd:  [some boos, and a stunned silence as people try to think]

Politician:  My fellow citizens. I will get you free ice cream cones. We will all work together and contribute our fair shares. Keep your faith and vote for a better future.

Voice:  [the man is pulled down from the bench]  Stop that. Let go.

Crowd:  [loud cheers toward the stage]  Yes. You're the man. We're for you. We deserve the ice cream cones.

Keynes' Brilliant Moment

Fred:  Keynes proposed that everyone would have a job if the government would print more money.
Mike:  If true, why would anyone work?

A lost recording, England 1932:

Keynes:  There must be a way to end this depression. Along the way, we can show that government can be good, and business is bad.

Assistant:  How to do it?

Keynes:  I have it! There is not enough demand for goods and services. Something changed, and people stopped wanting enough stuff. They became suddenly and disastrously frugal, and no longer want to buy things.

Assistant:  With a raise, I would buy more things.

Keynes:  Forget the raise. If only we could find Martians who would buy more of our stuff, then people would work for the Martians. The increased demand would get money flowing, like a river, and we would all be rich.

Assistant:  Sir, we had a long talk about the Martians. We have gone over that.

Keynes:  OK, yes, no Martians. Where else can we get demand?

Assistant:  How about the French and Germans?

Keynes:  They are not rich enough. They are still progessing toward wealth through adaptation to Socialism, and they haven't yet adapted. They have this stupid notion that they should sell more of their stuff to us, not buy more stuff from us.

Assistant:  If you and I both had more money, we could buy things and help to raise demand.

Keynes:  More money? Eureka! The government can print up the stuff and spread it around. And, I can get more money by advising the government. The workers will chase those pieces of paper like catnip. They will become used to working again, instead of being lazy and stupid.

Assistant:  More people may find work. But Sir, the value of money will fall and prices will go up. Everyone now working and saving will be silently taxed to employ those extra people. And, what will happen when the stimulus stops?

Keynes:  First, we and our friends in government will all have more money. That has to be a very good thing. Second, in the long run we are all dead. Forget about tomorrow, it is in the future.

Assistant:  So, I get my raise?

- -
Use Inflation to Fool People
Keynesian economists expect most people to be slow-witted and unable to make rational economic decisions. The government tries to fool people into working harder by inflating the currency to just the right amount. But, it doesn't work for long.

"Keynesian Economics" in The Political Dictionary
Understand politics by knowing the meanings of things.

Econ 201: The Myth of the Economic Multiplier
You don't create $40 in wealth by paying $10 to mow your lawn.

The Deadweight Loss of Taxes
Collecting $1 in extra tax kills $2 in production.

A Short Argument Against Stimulus
It isn't so stimulating when you know that it must be paid back.

Let's Counterfeit Our Way to Wealth
If Obama and Keynes are correct, that there is a 1.5 wealth multiplier on spending, then $100 in spending produces $150 in wealth, and we should all benefit from counterfeiting. It is not my fault that the belief in a multiplier is so outrageous that it leads to this outrageous result.