Economic Lunacy

9/13/2010 – Larrey Anderson –
I know logical lunacy when I see it. I may not be an economist, but as one trained in logic as a philosopher, I have been horrified by the recent economic policies of both Presidents G.W. Bush and B.H. Obama.

Let’s start with Bush and the first TARP bill. My heart broke when Bush announced the TARP program. I understood that the $750-billion blank check (to be spent at the discretion of the next Secretary of the Treasury — who turned out to be tax-cheat Timothy Geithner) might well trigger the end of our constitutional republic.

In explaining his reasons for proposing the TARP legislation, Bush said, “I’ve abandoned free market principles to save the free market system.” (The video of him making the statement is here.) These were obviously the words of a broken man — a president who had abandoned his principles and given in to the special interests of the big bankers, automaker unions, Wall Street, Fannie Mae, Freddie Mac, and powerful financial entities like AIG — and to pressure from a Congress that was indebted to these special interests. (Most of the TARP money ended up bailing out or being “loaned” to these institutions. Very little of the money went to the homeowners with troubled mortgages.)

Here is a rough parallel to Bush’s assertion that he had to desert the free market in order to save it: Imagine a young man who could have prevented the murder of his parents — he knew of, and thus abetted, the crimes instead. The youth’s argument to the judge, during his trial, is that he deserves leniency because he is now an orphan [i].

Watch the video. Listen to Bush’s voice and look at his demeanor. In my mind, Bush’s reasoning and attitude are too close for comfort to the young man begging the judge for indulgence. He has no parents. How he came to have no parents is trivial. We are expected to feel sorry for him now — not to judge him for what he did, or failed to do, in the past.

While it is true that Bush made lukewarm efforts to reform the mortgage industry, his admonitions were pooh-poohed by leading Democrats. Bush never seriously pushed the reform issue or vetoed any legislation that ultimately led to the mortgage meltdown.

Even more irrational was Obama’s first statement, after taking office, describing his “stimulus bill” and how the legislation was necessary to solve the economic crisis:

It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that’s moving through Congress is designed to do.

This reminds me of a deconstructionist historian who claimed, “… [The] Pacific [Ocean] is in reality a European artifact, a construct of the European mind [ii].”
As the philosopher David Stove said of the historian’s outrageous claim, “If the writer just quoted were to be dropped midway between Valparaiso and Dunedin, say, and asked afterwards whether he still thinks the Pacific is a construct of the European mind, that might do; though probably it would not.”

Unfortunately, for us, President Obama is not a second-rate historian at a third-rate university arguing that the Pacific Ocean is a social construct. Obama is the leader of the largest economy in the world. He claimed, “It is only government that can break the vicious cycle. …” [Emphasis added.]

We elected Obama to lead us out of an economic catastrophe. Metaphorically speaking, we found ourselves fiscally floundering somewhere in the Pacific Ocean without an economic lifeboat. Obama promised that he could get us safely back to shore.
Notice how amorphous Obama’s statement is: “only government …” What branch of the federal government could “break the vicious cycle” [iii]?

The military? They are good at breaking things. Perhaps the army could have forced people to go to work. But our armed forces were otherwise occupied.

Maybe Obama was speaking about the Department of Agriculture. According to his official bio, Secretary of Agriculture Tom Vilsack “has worked to implement President Obama’s ambitious agenda to turn around the economy and put Americans back to work.” Let’s take the administration’s word that Tom’s a hard worker. But Vilsack is not a farmer and knows next to nothing about agriculture.

Vilsack’s Department of Agriculture bio describes his qualifications thus:

He received a bachelor’s degree from Hamilton College in 1972 and earned his law degree from Albany Law School in 1975. Following school, he and his wife Christie moved to Mt. Pleasant, Iowa — her hometown — where he practiced law.

Vilsack may have watered the plants in his office on occasion, but it is hard to believe that he,and the Department of Agriculture are going to “break the vicious cycle” of jobs lost in the agriculture (or any other) industry.
Perhaps it’s the Department of Energy that will break the cycle. Secretary Steven Chu’s bio sounds promising:

Dr. Steven Chu is charged with helping implement President Obama’s ambitious agenda to invest in clean energy, reduce our dependence on foreign oil, address the global climate crisis, and create millions of new jobs. [Emphasis added.]

Now we’re talking. Chu’s gonna create millions of new jobs!

There is a problem: Chu has never mined for coal, never drilled a well, and never built a hydroelectric dam or a nuclear reactor. He has never held a job remotely connected to the everyday production of the energy that is vital for all our economic activity.

According to Chu’s official bio,

He remains active with his research group and has recently published work on general relativity and single molecule biology and biophysics that includes sub-nanometer molecular imaging with optical microscopy, cadherin adhesion, neural vesicle fusion, and nerve growth factor transport.

This man will create millions of jobs through the Department of Energy. Really?
Reread that résumé. It is far more likely that Chu (whose specialty is molecular biology) will invent a mind-altering drug that will delude us into thinking that we all have jobs and “clean” energy [iv].

It is true that the federal government is hiring a record number of lawyers and other bureaucrats — maybe that’s what Obama meant when he asserted that only the government could break the cycle of lost jobs.

We could go on and on — but it is time to draw a veil over this nonsense. Words (“constructs”) do not create physical oceans any more than governments create real jobs.
Randall Hoven, using Congressional Budget Office data, has shown exactly where Obama’s stimulus money has been spent. Take a look at the chart here. Nothing in these figures points to the creation of meaningful and productive jobs.

We were promised that Obama’s stimulus plan would halt unemployment at 8%. The jobless rate has climbed to nearly 10% and shows no signs of falling. It has also been asserted that the Pacific Ocean is a social construct. The gullible are free to continue to believe both. A few words of admonition to the true believers are in order: be careful while flailing around in thousands of square miles of a “construct of the European mind”…and good luck finding a job.

HT: American Thinker

[i] Some of the counterexamples in this article are variations on arguments from an essay “Philosophy and Lunacy: Nelson Goodman and the Omnipotence of Words” by the Australian philosopher David Stove. I have freely adapted Stove’s examples to fit my presentation.

[ii] New York Review of Books, October 13, 1983, p. 31.

[iii] I will assume that Obama was speaking of the federal government — since the president is not yet in charge of state and local governments.

[iv] Here is a description of what the uses Chu’s research is leading to: “This imaging method covers a scale range from tens of micrometers to Angstroms and provides valuable structural information for numerous scientific disciplines including structural biology, cell biology, medical and pharmaceutical science.”

Somehow, I can’t see how this research is going to put gasoline in my car.