Sunday, August 2, 2009


Yesterday my brother told me that he did not believe that any person who could get dressed in the morning could believe that one could tax (or borrow) a trillion dollars from the economy, spend it in the economy, and help the economy.

I assured him that I know plenty of people who are exactly like that. They believe that government can levy a $200,000 tax on a business person who takes home $150,000 per year and have no effect on anything.

I said, "There are two kinds of functional adults out there. One kind believes you can spin straw into gold (ala Rumplestiltskin) and another kind of person believes you cannot."

He said, "But they don't really believe that."

I said, "I have talked with many of them. They really believe it."

He said, "But they don't really believe it."

I said, "Yes. They really believe it. Some of my friends believe it. In my economics courses, there are always a few people who believe it. Some admit that they make decisions based on how they feel and don't want to think hard, but some think much too hard."

He said, "No. I mean, they don't really believe it. They couldn't."

We were at an impasse.

At the risk of offending those who believe we can spin straw into gold (as if I had not already), I think the perception comes from being a certain kind of intellectual. For instance, there are professors who insist that words have only private meanings--that there is no common meaning. And there are non-professors who follow these folks. But you should never ever hire one of those people to build a house for you, grow food for you, or do anything else in the practical realm where people could die.

Except for the professors and a few other "thinking" classes who follow them, however, no one asserts that such propositions (straw into gold, words mean nothing) are true with regard to practical matters such as immediate food and shelter.

However, people will assert that we can spin straw into gold with regard to the aggregate, or the abstract. With sophistry, we can put aside some basics.

For instance, during the health care debate in the Clinton administration, an economic truth came home to me. And it is a hard truth to dispel.

The nation pays for the nation's health care.

We can pay through out-of-pocket payments to doctors, through insurance premiums, or through taxes. But the nation pays for the nation's health care.

So the question becomes, "Which way is more efficient?" Which methods of payment encourage people to conserve while they consume? The best method of paying would have me never consuming $100 worth of something that is only worth $25 to me. Having others pay for my health care will invariably encourage inefficiency. Inefficiency means that we are taking food, shelter, and other worldly goods from people and destroying them. In my previous example, someone does not have food for the week because I spent their money on me. I may have destroyed $100 of their value to increase mine by $25.

Recently I saw a politician* assert that by looking at the cost of health care paid for by government, we dwell on the glass being half empty. That is true. The realist realizes that the glass is half empty and is also half full.

However, what that politician is currently attempting is to pour RC Cola** from my glass into someone else's glass, siphoning off some for his own glass. Meanwhile, he tells me that if I observe that my glass is nearly empty, I am a pessimist. That is, this politician says, "Forget about that guy with the empty glass," consistent with William Graham Sumner's noteworthy essay.

Since I have rambled in this post, I cannot end it properly.

So I return to my brother. He operates a crane on an offshore rig. If he messes up, people die and property is damaged. He realizes that words must mean things. He realizes that in the abstractions of life, that there are concrete necessities. And that when one smacks into concrete, it hurts.

Perhaps most engineering professors understand concrete--most journalism professors do not.


*Who, incidentally, has a string of ethics violations pending because he did not report taxable income.

**Although I have drunk RC Cola in the past, I am not a great fan. I use the example for its folksy twang.

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