More Economic Illiteracy
Comments in the "Chanticleer" column of the "Weekend Australian Financial Review" illustrate just how pervasive "collectivist" thinking and muddle-headed economics has become (even in supposedly informed publications!).
In talking about the Australian election and the policies of the Labour party, Chanticleer makes this comment.
"Both parties have fallen into the nonsense of promising budget surpluses - which may be good politics (doubtful) but is certainly bad economics.
There is nothing wrong with budget deficits. Indeed, they may be desirable if the economy slows dramatically".
Such is the extent of the infection of collectivist thinking and Keynesian economics! On the most charitable interpretation, there is an argument for running short term deficits in tough times, provided, of course, this is balanced out by surpluses when things are better. Unfortunately, this second part of the equation seems to get overlooked by most governments!
Later in the article, Chanticleer refers to Labour plans for increased spending on services such as education and health and regards these as a self-evidently good thing (with some more muddle headed thinking and justification).
The point of this comment is simply to point out just how corrupted "conventional wisdom" has become, even among people who should know better. Contrast Chanticleer with Gary North's comments from his newsletter today.
"Thrift. This is the way to wealth. This is the road out of personal poverty. This is the means of improving the output of other workers and therefore the means of overcoming their poverty. It's a win-win deal.
To the extent that you create a permanent comfort zone as a consumer -- contentment with most of what you already possess -- you create the means of dealing with your discomfort zone as a producer. You build up a nest egg of savings. You invest in your education. You improve your productivity. You acknowledge that you are not entitled to a comfort zone as a producer. You must become content with life in a discomfort zone.
When most producers accept this, freedom is secured.
Whenever they refuse to accept this, freedom is at risk. A nation of comfort zone-seeking producers will provide money to elect politicians who see their task as putting consumers into the straitjacket of the status quo.
When the consumer is in a straitjacket, he is in a discomfort zone. So is liberty."
In a nutshell, the great contest of ideas in our time is between thrift and productivty, on the one hand, and consumption and sloth on the other. Unfortunately, the curse of mis-representative democracy means that consumption and sloth has become the prevailing public policy in the West! The Brian Tracy book ("Something for Nothing") that I mentioned the other day discusses this further.
In talking about the Australian election and the policies of the Labour party, Chanticleer makes this comment.
"Both parties have fallen into the nonsense of promising budget surpluses - which may be good politics (doubtful) but is certainly bad economics.
There is nothing wrong with budget deficits. Indeed, they may be desirable if the economy slows dramatically".
Such is the extent of the infection of collectivist thinking and Keynesian economics! On the most charitable interpretation, there is an argument for running short term deficits in tough times, provided, of course, this is balanced out by surpluses when things are better. Unfortunately, this second part of the equation seems to get overlooked by most governments!
Later in the article, Chanticleer refers to Labour plans for increased spending on services such as education and health and regards these as a self-evidently good thing (with some more muddle headed thinking and justification).
The point of this comment is simply to point out just how corrupted "conventional wisdom" has become, even among people who should know better. Contrast Chanticleer with Gary North's comments from his newsletter today.
"Thrift. This is the way to wealth. This is the road out of personal poverty. This is the means of improving the output of other workers and therefore the means of overcoming their poverty. It's a win-win deal.
To the extent that you create a permanent comfort zone as a consumer -- contentment with most of what you already possess -- you create the means of dealing with your discomfort zone as a producer. You build up a nest egg of savings. You invest in your education. You improve your productivity. You acknowledge that you are not entitled to a comfort zone as a producer. You must become content with life in a discomfort zone.
When most producers accept this, freedom is secured.
Whenever they refuse to accept this, freedom is at risk. A nation of comfort zone-seeking producers will provide money to elect politicians who see their task as putting consumers into the straitjacket of the status quo.
When the consumer is in a straitjacket, he is in a discomfort zone. So is liberty."
In a nutshell, the great contest of ideas in our time is between thrift and productivty, on the one hand, and consumption and sloth on the other. Unfortunately, the curse of mis-representative democracy means that consumption and sloth has become the prevailing public policy in the West! The Brian Tracy book ("Something for Nothing") that I mentioned the other day discusses this further.
posted by Kevin Francis at
1:57 pm
