Tuesday, September 18, 2012

Original Cardinal Sin of Keynesianism

Jump, if you will, into the co-pilot's seat of the Captain's personal F-22 fighter plane.  We're going to fly really high because we are going to need a very high bird's eye view in order for me to make my point.  So high that your brain will disassociate itself from its current environment, allowing you to have the perspective to see what I see.

As it stands right now, be you left or right, we are looking for government to do something to get us out of this economic mess.  The left votes for more government action, while the right votes for less government action.  Regardless, both require government action.  "Lowering taxes, increasing taxes.  More regulation, less regulation. My question is one that you need to be high up to observe:

"What business is it of the government's how well the economy does anyway?"

Stick with me here.

I don't know if it was ever like this (though I presume it was upon the founding of the country), but why should the government or the people in the government worry about what its private citizens do?  In my "ideal world" of how government would work, it would provide the basics of public goods that protects its citizens and allows for an efficiently operating society, but beyond that, the government (for better or worse) should have no skin in ANY regard of its people.

It wouldn't care if the economy was booming or not.

It wouldn't care if gays or straights want to get married in that it wouldn't license such things.

It wouldn't care if a company went green or not (and it certainly wouldn't finance any of them ala Solyndra or the SBA).

And if the people so mismanaged a business (GM, the banks, etc.) it wouldn't bail them out.

The government would be a very distant, cold and remote entity who if anybody came in and said, "You need to help us" it would say, "not my problem.  We do roads, defense, infrastructure and law.  Your economic problems are not under our jurisdiction.  Deal with your own mistakes."

In short the government would leave the people to enjoy and suffer 100% of their successes and mistakes, allowing the population to learn (and thereby advance) much more rapidly than had it intervened all the time either trying to make things "fair" or "better."

Now with that concept in mind, I have a question -

What arrogant idiot decided it was OK to have the government start intervening in people's affairs?

And once again we have to be high up in the sky for you to realize the question I'm asking.

For example, who decided it was the government that was going to tell us private citizens how much bio-diesel we are going to make in 2013?

Who decided light bulbs were no longer good for us?

Who decided it's only the Fed that can get us out of our economic woes?

I could go on and on about the veritable Nazis Fuhrers Bloomberg and Obama (Michelle) telling us what to eat.

I know the answer is (usually) leftists and crusaders, but my question goes beyond individual, specific things that are obviously a violation of a person's individuality and freedom.  I'm talking something much more fundamental.  AND I'm talking about who or what group of people ORIGINALLY decided it was OK to cross this line and start destroying freedom.

For example the concept of "expansionary" and "contractionary" fiscal policy.  What arrogance and bravado did it take for somebody to say, "Hey, the government can be used to expand and contract the economy in order to control inflation and growth!"  It's none of the government's damn business whether an economy grows or contracts. That is up to the private citizens.  Additionally, wouldn't you presume a government fiscal policy (it any at all) would be constantly expansionary?  Wouldn't the government set up minimal rules and regulations that would result in a perpetual expansionary policy, conducive to maximum economic growth and be done with it once and for all, never to revisit it again?

No, it took some idiot, some power-hungry totalitarian to decide that, "Hey, I know what's better/best for the people!  AND IT'S MY JURISDICTION TO INTERVENE!"

So my question is this - who was that guy?  Who committed this "first, original cardinal sin of Keynesianism?"

Was it John Maynard Keynes himself?  I doubt it, governments had been intervening long before he hit the scene.  Woodrow Wilson maybe?  Somewhere, I imagine, at least in US history, there was a group or a person who over-stepped the boundaries and deemed it the government's domain to cross that line and start taking a vested and unwarranted interest in what its peoples' private affairs.

Anybody with a better background in US history have an answer?


Anonymous said...

It's because of the fundamental realties of a government. Human and political incentives built into the system combined with the unique power to implement it leads to what you have now. Politician thinks I can get more votes / less rioting if I implement discrimination against gay people or create a welfare block. Has there been any government that has not legislated morality?

Anonymous said...

"The Congress shall have power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any Department or Officer thereof.

Article 1 Section 8 Clause 18 of The United States Constitution.

This is what is known as the Necessary and Proper Clause, or in layman's terms The Elastic Clause.

This was the one aspect of the constitution that almost resulted in it's failure to be ratified. Which is why some states refused to ratify unless a Bill Of Rights was added.

Alexander Hamilton used this clause to help create this nation's First National(central) Bank. Thomas Jefferson then used this clause to broker the purchase of the Louisiana Territory.

So my dear Captain, when did the Government start abusing it's power? The answer is from the very beginning. I ask you how many of the individual that were murdered by the US Government during The Shay's Whiskey Rebellion were actual colonial/minute man veterans of the revolution itself?

Anonymous said...

WWI, Income tax

Before that the fed gov was 3 guys and dog, and the dog was there to bite anyone with an idea.

After that they had a basis to tax income and everything went to hell.

Anonymous said...


Who went to war to establish the precedence of federal power over the States. While I agree with his belief that slavery was just flat out wrong - the unintended consequence was the creation of an all-powerful central government.

It is always the unintended consequences that get you.

Anonymous said...

Captain, it really is orginal sin. You need to look no further than Hamilton for its origins in the USA. The public debt being a public good ring any bells? The scamers and hustlers were in on the ground floor. We owe Aaron Burr a great debt.

Anonymous said...

I think its because the government now controls the money supply. back in the old days when money was real and not created out of thin air like it is now, the government couldn't expand and contract the money supply and control interest rates. We need to go back to private money where the users of currency can pick and choose which form of currency they use. If a currency isn't a store of value - like it really isn't any more, people will use a different one.

back in the good old days if a government needed money that had to get it by either taxing it or borrowing it. They couldn't make it out of thin air end then control who got it like they do now.

I won't say we have to go back to gold, what we have to do is go back to private money that people aren't coerced by law into using. - minuteman

Anonymous said...

"It wouldn't care if gays or straights want to get married in that it wouldn't license such things."

Gay marriage is a code word for gay adoption, and any government ought to enforce enough law to know that it SHOULD protect children from such insanity.

As for government interventionism, think first and foremost of Prohibition. Look at the demographic that pushed for it the most. The puritan white knights, naive women, and alpha male smuggler types. Bootleggers and Baptists.

Yes, illegal labor also tries to seek rent. No, no one except for the slimiest politicians thinks about this.

J H P said...

May this be of any help?


T and A man said...

"What arrogant idiot decided it was OK to have the government start intervening in people's affairs?"


To create and maintain a heterogenous society, rules had to be made, adhered to and enforced.

Much of the social areas that government meddles in, such as marriage, are the same social constructs the church used to manage.

Now back to the saying power corrupts, absolute power corrupts absolutely... you get the picture.

This is where 'green power' and 'biodiesel quotas' come in. They are moral objectives, not economic.

'Reality' Doug said...

Here, hear! Evolution (natural selection) is more intelligent and just given mortal restrictions than authoritarian humans can ever be. The question of when did we go wrong is philosophically wrong, but that is trivial compared to how philosophically correct the blog is on the main point:

Because the constitution of the people is more important than the Constitution...(1) let each generation get immediate feedback and pay its bills, (2) (@ Anonymous, lol) let Jefferson buy the Louisiana Territory even thought it was unconstitutional. Jefferson's big sin to me was using the then Federal Government to try and kill Aaron Burr, my favorite Founding Father (until I learn more I suppose).

I believe the philosophy of the question is the antithesis of the philosophy of the main point. The brainwashing is never completely gone. The red pill journey pushes to an asymptote. I have studied history extensively with not much to show for it, mostly Doug's Neuropsychic Prototype for the American Have-not, ch. 1.

The proper question to ask is:


The answer I suspect is never to a very high degree in terms of potential. The United States of America is remarkable in the relative degree of doing that compared to the rest of history and apparently human nature. It is the fact that our natures in the Manosphere do not fit the overwhelming majority's nature than makes us, the would-be builders of society, the losers in this temporary wrong-is-right cannibalism feast. The elite don't want competition in the building of the future, obviously.

Any people who decide to follow the ideal presented on properly limited government will become so powerful in freedom and affluence it will be incredible. Hell, anarcho-engineered social order my be possible. Ideals do come true progressively. I expect people in sub-Saharan Africa and elsewhere would turn their noses up to the 'ideal' of property rights as we practised them not too long ago. The bias is progress. The path is crooked. In the end, if there is a future, it will belong to philosophers because brains evolves faster than brawn. It is the brains of the NWO that scares me. We must use our brains to hone our moral code(s) and bide our time.

Ryan Fuller said...

F-22s are single seat fighters, Captain. :)

Oh, and the government didn't have roads and infrastructure on its list in the beginning.

Anonymous said...

Two concepts, perhaps controversial, are glaringly absent in the post above:

1) Government can (when not beholden to special interests) act as a means of collective action for the common good.
2) True freedom entails both positive and negative liberty.

As to the first point, you write, “It's none of the government's damn business whether an economy grows or contracts. That is up to the private citizens.”

Well, don't we often utilize government action to accomplish exactly those things that we cannot, as “private citizens” do on our own?

Jump, if you will, into the co-pilot's seat of my time machine. Back to the Great Depression. Imagine you are unemployed. As are 20% of your fellow citizens. What are you and other “private citizen's” supposed to do when there are countless applicants for every job opening and no macroeconomic demand? Honestly, what would you do?

If you were unemployed in the face of structural impediments to getting a job wouldn't you rally, organize, and pressure the government to act? What else could you do? Wouldn't any resultant government action, be, in a sense an outcome “chosen” by private citizens drawing upon means unavailable to them as individuals?

After all, there are many things necessary to human flourishing that are difficult, if not impossible to obtain through uncoordinated, individual action. Which is why government is often necessary to address what are known as “collective action problems.”

As an individual, for example, I cannot simply choose to enjoy a clean environment. However, I can pressure the government to prevent companies from profiting from negative externalities, such as pollution.

As to my second point, you write, “who or what group of people ORIGINALLY decided it was OK to cross this line and start destroying freedom.”

Framing your question in this way overlooks the possibility that government can augment freedom by providing the necessary conditions for an individual to do or be something of value. What does that mean?

Imagine, if you will, that you are a young adult in an impoverished, developing country. You are illiterate, there are no jobs available, and you suffer from malnutrition and a host of diseases. Oh, but according to your framing, such an individual would be perfectly free! Doesn't that seem a little off?

(check out this link for a more detailed analysis: http://plato.stanford.edu/entries/liberty-positive-negative/)

That such an individual would be perfectly “free” seems ridiculous because they lack any true opportunity. From this perspective, some government action can be seen as an attempt to provide opportunity or positive liberty (education, health care, etc.). For example, when the government boosts demand through stimulus spending (in a liquidity trap) it is actually augmenting liberty by providing opportunity through job creation. To be honest, if I was unemployed in the face of 8% unemployment, I would spend every minute not sending out job applications or devising business schemes, pressuring my political representatives to pass another stimulus bill.

In short, to answer your question, we have always called upon government to carry out our collective will. (Whether it has always been responsive, or pandered to special interests is another issue.)

There is no reason why we should preclude ourselves, a priori, from taking collective action in the economic sphere.

Captain Capitalism said...

Aha! I have you Mr. Fuller.

MY F-22 DOES have a passenger seat!

Specially made for me. So ;P

Anonymous said...

Oh it is the way governments worked in the Old World. "L'Etat, c'est moi" as Louis XIV said - "I am the state."

Jack Amok said...

Jump, if you will, into the co-pilot's seat of my time machine. Back to the Great Depression. Imagine you are unemployed. As are 20% of your fellow citizens.

Hang on there, Champ. Dial that time machine back another ten or fifteen years and discover that the Great Depression was caused by the federal government trying to prop up farmers who failed to manage the mechanization of their industry properly.

There were a few other things the feds did to contribute to the economic disaster that left so many folks out of work, but the origin was in a speculative bubble in farming brought about by federal farm subsidies and price supports. Said bubble was then eventually popped with extreme violence by Smoot-Hawley tarrifs sparking a trade war in the wake of the market crash of '29.

The FDR administration took over and, in the name of managing the disaster, made it worse. They promulgated a bazillion new regulations, sent prosecutors after businesses who violated any of them, hamfisted the banking industry, and in perhaps the most stunningly stupid move possible, imposed wage and price controls that froze the economy in place - while it was in a depression.

Your "collective action in the economic sphere" is a recipe for disaster, Champ. Put that time machine of yours to use - it's called "History" - and you'll find out that collective economic action has never worked well, and almost invariably produces misery and doom.

Anonymous said...

(Cliff Arroyo)

"What arrogant idiot decided it was OK to have the government start intervening in people's affairs?"

It's called human nature and libertarians are often just as ignorant of it as liberals.

Your ideal state of government is no more possible than the dictatorship of the proletariat.

All human societies find ways to meddle in the lives of their members (to the general approval of even those who get meddled with a lot). Those who couldn't stand it became wanderers or hermits (or giant pains in the asses who would be shunned or ultimately killed).

Human evolution has been shaped so that those who care about and meddle in the lives of other group members had more reproductive success than rugged individuals going their own way.

The larger and more complex the group the more the meddling. If you want to change that go back in time 100,000 years or so and find different hominids to be descended from.

Koop said...

Bastiat summed this sort of thing pretty well in The Law. (short, sweet, and freely available on the 'net)

When socialist know-it-alls gain power, their views compel them to engineer society more to their liking. Of course, they view themselves as a separate superior class, and refuse to apply their policies equally to themselves.

GregMan said...

When did government start meddling in economies? As long as it has existed.

Public works projects? Ancient Egypt. Those pointy- bricky- thingies in the desert. Also the walls of ancient, "walled" cities like Jeicho.

Monetary shenanigans? Rome, for one. The economy of the Roman Empire nearly collapsed in the Third Century A.D. when the central government debased the currency (which is another way of saying it inflated it). Also Rome built roads from Rome to it's provinces (public works program), in part to provide a means to get the army to where it was needed.

Remember, the Constitutional Convention was called to re-engineer the U.S. central government after the government established via the Articles of Confederation had proven ineffective. The whole POINT of the constitution was to make for a stronger central government. The Bill of Rights was an afterthought.

Oh, and as far back as the Civil War, the federal government was intervening in the economy in a major way, for example by underwriting the construction of the transcontinental railway.

What we are left with is more a matter of degree. The question really is, when did the federal government start meddling so much, so expensively and so often that the individual's rights became clearly circumscribed? I think the answer to that was the "progressive" Roosevelt (Teddy) and Wilson administrations, particularly Wilson during WWI. That's when government REALLY became intrusive, and began to cost so much that it decided to garnish it's citizen's wages through the income tax. Even the conservative and business-friendly Harding and Coolidge administrations never managed to repeal all the crap that Woodrow Wilson came up with.