Who's on first? (revised for the 21st century)

Adam Smith: So whose money is being used for the stimulus?

Barack Obama: The taxpayers'.

Smith: What will you do with it?

Obama: Spend it.

Smith: What would they do with it?

Obama: Spend it.

Smith: Why is it better that you spend it?

Obama: They might save some of it.

Smith: Don't they need to?

Obama: No. The government gives The People social security for retirement, unemployment, and the measles.

Smith: How does the government pay for this?

Obama: We tax The People.

Smith: So...they don't need to save because the government saves for them?

Obama: No. We make 'em pay FICA taxes and then spend the money.

Smith: So where does the money come from for social security?

Obama: Some people die before they are eligible for benefits.

Smith: Hasn't the population curve changed so more people are living long enough to receive payment relative to those paying social security taxes? People living too long, essentially?

Obama: That's what government health care will fix.

Smith: So you're implementing government health care to kill off people at a younger age?

Obama: No. I'm implementing it to destroy the evil money-grubbing insurance providers.

Smith: And government insurance will be better?

Obama: Sure. The government can afford to operate at a loss, so there is no need for "profits" (which are really wages stolen from the proletariat).

Smith: Who compensates for the loss?

Obama: The taxpayers.

Smith: So doesn't everyone end up paying the same amount they would pay the insurance companies?

Obama: No. I said "the taxpayers," not "everyone." The rich have to cover it.

Smith: Who's rich?

Obama: People who earn over $250,000 a year. Wait, $200,000 a year. Wait, $150,000 a year...

Smith: But aren't these people often the entrepreneurs and investors who drive the economy?

Obama: Yes.

Smith: Why tax them?

Obama: Because it's not fair.

Smith: What's not fair?

Obama: That they make that much money when the average family at the poverty line only owns one television and most are not flatscreens.

Smith: But don't the poor usually not put as much into the economy?

Obama: They contribute just as much, you racist, classist, bourgeois swine.

Smith: Just askin'. What are you going to do about this situation?

Obama: Tax the rich and give to the poor.

Smith: How?

Obama: I'll start by signing a stimulus bill to jump start the economy. I'm also thinking of taking up archery.

Smith: Who gets the stimulus money?

Obama: The rich.

Smith: The rich?

Obama: The rich. Only they have to spend it on groceries. No business jets or office makeovers.

Smith: Or what?

Obama: Or we crucify them on national television before Congress.

Smith: But does it really matter to economic recovery how they spend the money as long as it gets back into the economy?

Obama: No.

Smith: So why do you care how execs spend the stimulus bill?

Obama: Grocers make less money than business jet manufacturers.

Smith: So we're back to wealth redistribution.

Obama: Such a harsh term...I prefer "enhancing socio-economic harmony with emphasis on the appropriate allocation of capital and the benefits there derived."

Smith: What does that mean?

Obama: Wealth redistribution.

Smith: Why not just let the people keep their money and spend it how they choose?

Obama: This way the government has oversight.

Smith: Oversight?

Obama: Oversight.

Smith: What's that?

Obama: Oversight?

Smith: Oversight.

Obama: I actually don't know. I understand it involves czars.

Smith: American or Japanese czars?

Obama: American, of course. I've put a high protective tariff on foreign czars.

Smith: I still don't get why the government should spend the money. Doesn't that mean that less money actually re-enters the necessary sectors?

Obama: Yes. That's why we are putting the Fed rate on the floor and deficit spending at the same time. We are "loosening the money supply."

Smith: Is that basically the same as printing money?

Obama: Yes. But it's more eco-friendly.

Smith: Does that cause inflation?

Obama: Yes.

Smith: Isn't that, well, bad?

Obama: Only for people who have been saving.

Smith: And they should have been counting on social security?

Obama: Yes.

Smith: But how does loosening the money supply actually help the economy?

Obama: It enables people to pay off mortgages.

Smith: Couldn't they pay them off before?

Obama: No.

Smith: Why not?

Obama: They couldn't afford the mortgages.

Smith: Then why did they get large mortgages in the first place?

Obama: People do silly things sometimes. You know, cling to guns and religion, vote Republican, listen to country music, pay attention to Rush Limbaugh...

Smith: And you are rewarding irresponsible finance?

Obama: Hey, hateful bourgeois scum, some of these people can't pay because they lost their jobs.

Smith: How does loosening the money supply help them? Especially if it devalues savings?

Obama: It creates jobs.

Smith: Jobs?

Obama: Jobs.

Smith: Will that work?

Obama: It already has.

Smith: Isn't unemployment at a thirty-year high?

Obama: No, I mean it got me elected.

Smith: Oh.

Obama: But job creation will save the economy.

Smith: If a job is economically viable, won't it already exist?

Obama: No.

Smith: Why not?

Obama: Yes we can!

Smith: Hm?

Obama: Yes we can!

Smith: Your grammar is wrong.

Obama: Well, CHANGE it!

Smith: You need a comma after the "yes." But quit dodging. Won't all economically viable jobs already exist?

Obama: If by "economically viable" you mean present without government intervention, then yes. We can.

Smith: Stop saying that.

Obama: I can do to you what I did to Rush.

Smith: No, you can't. I've been dead for three hundred years.

Obama: Whatever. Facts never really worried me. What matters is getting people employed. Then production will increase. Then the recession will end. Then I'll be crowned--

Smith: Isn't that what FDR tried?

Obama: Yes.

Smith: It didn't work.

Obama: Yes, it did.

Smith: No, it didn't.

Obama: Yes, it did.

Smith: Have you actually read a history book that some leftist professor did not feed you through a straw?

Obama: The Depression ended, didn't it?

Smith: Only because we had to blow up a few other countries (WWII) and needed the spike in production.

Obama: Well, there you go!

Smith: But the need for more production came first. It was followed by job creation.

Obama: In the absence of countries to blow up I propose job creation.

Smith: Shouldn't you encourage new enterprise by, say, cutting the capital gains tax?

Obama: No.

Smith: Why?

Obama: Because it taxes rich people.

Smith: But where will new companies get money if investment is discouraged?

Obama: From the government.

Smith: How is government money better?

Obama: Strings.

Smith: Strings?

Obama: Strings.

Smith: What are strings?

Obama: They enable the government to control the businesses.

Smith: And that's good?

Obama: Yes.

Smith: Why?

Obama: Because it enables the government to control capital and, eventually, all major industries.

Smith: Isn't that what Lenin did?

Obama: Maybe.

Smith: Didn't it fail?

Obama: Only when the government had to start killing peasants.

Smith: And that's okay?

Obama: If the peasants had ever received federal funding, you bet.

Smith: I'm sorry, but none of this is making sense to me.

Obama: Adam, Adam. If you can' t get the basics you'll never earn your degree in economics. And definitely not from a prestigious school like my alma mater.

Smith: Mr. President...

Obama: Yes?

Smith: If I weren't dead I'd be buying plane tickets for Switzerland. At least they admit to being socialists...

The Joy of Meddling

Ah, the economic stimulus package. This delightful little financial bombshell contains more pork than 500-pound boar. Even more irritating is its general premise, a premise that clearly reflects the Four Laws of Humanity. Let's walk through this logically.

The first assumption made by the stimulus sellers is that the economy will fail unless the government pours money into certain sectors. Here we see Law One at work; the government is attempting to act in someone's best interest. Whose? Their own. Good old Machiavelli is hard at work. Most representatives are probably jumping behind this bill because it is widely perceived as necessary to economic recovery. Thus they protect their short-term political future. Enter Law Two. Widespread ignorance of how the economy works is contributing to a general desire to "fix something." As a result, people call for legislation. Legislation will likely have little obvious impact on the life of Joe citizen and no real effect on the life of Joe congressman as it corrodes the structure of the economy.

This is extraordinarily unfortunate given the presence of the Third Law. Without a new datapoint clearly illustrating the harm regulation inflicts, our society will continue until one occurs. Like boiling a frog, though, we respond only to sudden, tangible pain. Gradual economic shrinkage may be insufficient to jar us from our pragmatism. The future course of this nation may well be a gradual slide to the left. This slide continues until something goes drastically wrong.

Does a solution exist? Memory. Look at what happened to New Zealand. They tried economic regulation, too. They destroyed their economy and took fifty years and a return to free-market systems to recover and start exporting sheep again. As a nation, we must learn from the mistakes of others and refrain from repeating them. They who forget the past are doomed to repeat it. We always think we are somehow above the mistakes of our predecessors. We are wrong. Time to wake up and smell the Marxism.

Of Mice and Men and Economists

The economy. Panic. Dismay. Every pundit seems to be singing "It's the End of the World as We Know It." They are correct, but I suspect for the wrong reasons. The free market, I once read, is based on four primary economic freedoms: to try, buy, sell, and fail. In other words, to start an endeavor or business, exchange goods and services without regulation, and to fail in an endeavor or business. These elements have been steadily eroding for some time, but the abolition of the ability to fail is perhaps the most startling. For one thing, someone will end up paying. If Wachovia goes belly-up, either its shareholders or the taxpayers are going to take the blow. The shareholders will be more cautious about investing in future companies with unsound loaning policies. The taxpayers are basically sheep unable to trace their shrinking paycheck's use to the bailing out of a failed enterprise. When "government money" is used, no incentive is provided to exercise greater caution or better policies--we hear only the promise of "oversight." We can attempt to control industries, or we can let them fail, learn, and rebuild.

We have chosen the former. Welcome to the U.S.S.A.

Why? Because we are desperate to "fix something." I find it ironic that we would actually rather believe that there is some fundamental flaw in the most effective economic system ever devised than admit we were fools. We built our lives, spending habits, and borrowing policies (on both sides of the loan) on money that was not there. Now, instead of allowing the economy to shrink to what is probably a size more reflective of our actual production, we are trying to loosen the money supply (through deficit government spending and cutting the Fed rate) to the level it needs to be to support our old habits.

We will regulate the economy to continue an illusion of wealth. We will skewer, as thoroughly as possible, those who practiced sound policies by handing their money to those who did not. We will scramble to "repair the damage."

We will wonder, in twenty years, why this is happening again.

I am not an economist. I also do not have five pounds of cream cheese between my ears. Sometimes I wonder about those we elected to lead us.