It’s raining dollars! What would Frederic Bastiat have to say about this if he could speak to us from 1848?
As government regulations grow slowly, we become used to the harness – Judge Robert Bork
We interrupt our regular programming. The President has just banned windows in order to benefit candle makers; candle production, he says, will stimulate the economy as long as candles aren’t melted by sunlight. The administration also announces it will nationalize candle manufacturing, allow greedy wax suppliers only 10% of the money they are owed by the candle makers, plus grant a 30% share of Acme Candles, Inc. to the UCMDWU (United Candle Mold Delivery Workers’ Union). New York Times White House correspondent asks Press Secretary Robert Gibbs what most enchanted the President before he was blessed with this economic epiphany.
OK, I’ve got the facetiousness out of my system. I wish I could take credit for this prescient concept. I’ll admit to only my personal sarcasm in tying the philosophy of that remarkably witty proponent of freedom and liberty: Frederic Bastiat, (see link to Wikipedia entries from the pictures on the sidebar) to our current state of affairs. Frederic Bastiat was a member of what was known as the French Liberal School in the 1840s (liberal as in the classical/original free market definition), warning of the folly of government intervention in the marketplace. His parable of a fictitious petition by candle makers to the French government to eliminate windows in order to prevent candles from melting – thereby increasing economic prosperity by insuring the success of the candle industry (at the expense of the window industry…oops) – is a hilarious anecdote. It also unfortunately illustrates the genesis of the president’s belief system.
Obviously above, I make reference to the bailout of GM, the perversion of the rule of law in throwing Chrysler bond holders to the wolves, and the artificial propping up of the UAW rather than normal bankruptcy pecking order. Bastiat’s fable of altruistic but ultimately damaging marketplace intervention, is echoed consistently by the current administration’s adherence to this paradigm of unlimited spending by fiat justified by its immediate/short term effects on various and sundry interest groups. In fact, Friedrich Hayek (see my previous two posts) said in a review of Bastiat that, according to 1930s economist John Maynard Keynes, the assumption of a multiplier effect (simply meaning a belief that the government can stimulate the economy by spending, producing a return greater than the cost of the stimulus; thereby increasing employment) on general economic prosperity would precisely mimic the argument of the candle makers!
Cash for clunkers (and maybe the upcoming Stimulus II cash for “cluckers” chicken farm bailout?) would most certainly fit neatly into these fallacies: money will do more good in the hands of the government, and it is the duty of government to see that all get what they “deserve”.
Lastly, Frederic Bastiat’s landmark book: The Law has remarkable parallels to the economically damaging entitlement philosophies of the current congressional majority. For example Bastiat says in the section The Results of Legal Plunder, “No society can exist unless the laws are respectable to a certain degree. The safest ways to make laws respected is to make them respectable.” This quote illustrates the current congress’s path towards a society in which greater than 50% of workers pay no taxes, and receive payments in the form of the Earned Income Tax Credit. Therefore, this non-tax paying majority – the receivers of public services and governmental largess – are able to award themselves through the ballot ever increasing free goods and services from the minority: the tax payers/suppliers of public services and governmental largess. I see no end to this increase in receivers, to include the resulting unconstructive inertia towards manufactured dependence.
So to bring my polemic to a close, I quote Bastiat one more time: “Legal plunder is identified as “… the law takes from some persons [what] belongs to them, and gives it to other persons to whom it does not belong…The person who profits from this law… will claim that the state is obligated to protect and encourage his particular industry…”
— Or nationality, ethnicity, income demographic, religion, color, blue collar, white collar, government employee, Woodstock museum, first time home buyer, union member, sexual preference, illegal immigrant, home in foreclosure, Wall St., Main St., small business, large business, self esteem damaging tatoo removers (I didn’t make this one up: see http://www.mcclatchydc.com/226/story/63697.html), “green” energy producer, municipality, farmer, auto parts supplier, environmentalist, “too big to fail” bank and insurance companies, student, teacher, cop, mechanic, ethanol producer, the bicycle spoke hooker-uppers’ guild, donut shop owners’ amalgamated, and last but not least……….Acme Candles, Inc.
Comments on the blog con or pro most welcome.