Idaho's Weekly Journal of Local & National Commentary Week 2815


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by Free Market Duck

Idaho Statesman thinks socialist economics can enrich economy and create Idaho jobs
May 31, 2009

Boise, ID – Listen up, gather round, shut up and pour yourselves another hot cup of Rocket Java, girl friends.  The Idaho Statesman is at it again, pushing more socialist sophisms and Keynesian Fake Economics in their standard Yes-it’s-OK, No-it’s-not OK schizophrenic style of editorializing.

   Take, for example, the Statesman’s Op Ed Opinion last Sunday, May 24th.

   The lead-in, to soften up the reader, says, “Ada County commissioners are in penny-pinching mode, as well they should be.”  So far, so good.

   Then, the yes-yes-yes of the schizophrenic Op Ed says, “Commissioners are talking about cutting their contributions to several regional planning groups, and that makes sense.”  OK, sounds good.

   Then, the Statesman coughs up the no-no-no portion of their Schizophrenic Op Ed and says, “Commissioners also cut $52,500 in contributions to a Valley economic development group, and that seems short-sighted.”

   Really?  Why doesn’t this Valley economic development group fall into the Idaho Statesman’s category of it’s OK to cut the spending?

   Because, as we discover in the Statesman’s answer in the very next sentence, “The last thing the region needs is a domino effect of cuts [i.e., not spending tax money on special interest groups] – which could stymie job creation, just when the Valley needs it the most.”

   Ding dong.  The Idaho Statesman says a government body, Ada County Commissioners, should cut spending but NOT for this particular group because the Statesman assumes the false Keynesian economics premise that spending paper money printed out of thin air somehow produces a multiplier effect that can stimulate job creation.

   Apparently, the Statesman editors have bought into the federal crap that President Barack Obama and his socialist Economic Advisors are attempting to foist down our throats on the premise that for every $1 of federal spending, the nation will – through some VooDoo magic -- reap $1.57 in economic wealth.  By spending, or rather inflating – which is a clever form of counterfeiting and taxation -- the U.S. deficit to $11 Trillion, the Obama Administration expects to stimulate our GDP by 1.57 times.  The real joke is that we already have $680 Trillion in toxic derivatives floating around the global economy today – forty times current GDP of $15 Trillion – and it didn’t stimulate squat.  In fact, we now have high inflation and a whoop-tee-doo Depression.  Building their economic conclusions on their mathematical fairytales, Obama’s socialist planners then divide their future mirage of new “stimulated” wealth by union wage rates and calculate, erroneously, that they can somehow produce 4 million new jobs for America.

   Unfortunately, the above Keynesian socialist economics is just a glob of economic balderdash.

   Think about it for a moment.  Nobody can simply print up non-backed or non-collateralized paper money and stimulate an economy into riches.  In fact, the exact opposite must happen.  That is, inflation of the money supply does not stimulate production; it hinders all economic activity as everybody tries to adjust to higher prices, dislocation of capital, and future unknown consequences brought about by governmental intervention.  If a government really could print itself into riches, the former Soviet Union, China, Cuba and all socialist nations in Latin America would have become filthy rich by now.

   Nor can the government, on net, enrich the economy or create more jobs by taking from Peter – taxation – and giving to Paul.  Governments can certainly rob Peter and redistribute the booty to their friends but, on net, governments cannot enrich economies through taxation or printing up paper money out of thin air.

   The editors at the Idaho Statesman continue in their schizophrenic folly by correctly pointing out all the parameters characterizing a Depression: a real estate slump, a dead construction market, a nose-diving retail market, and, closer to home, job layoffs with 2,500 pink slips from Micron in Idaho, and then babble about it as if they had no idea whatsoever how our current Depression came about.  Perhaps they really don’t know.  News flash to the Statesman: it certainly wasn’t due to a lack of enough deficit spending and hyper-inflation of the U.S. Dollar.  And it wasn’t due to a virus from Mars.  But since the editors have no clue, they buy off on Obama’s current fascist economic business model – i.e., the state issues government rules to all corporations about how they will conduct business.  Think Mussolini’s Italian fascism of the 1930’s and 40’s.

   Continuing with their Economic Village Idiot solution to create wealth and jobs, the Statesman concludes, “It’s time to market the Valley.”

   Right.  Time to market the valley.  But by whom?  And with who’s tax money?

   Why, with YOUR tax money, of course.  Meaning, it’s time for Ada County to continue taxing the citizens of Ada County and the County Commissioners should dole out tax money to special interest groups such as the Statesman’s choice, the Boise Valley Economic Partnership (BVEP), so they can intervene in the market to stimulate and guide the creation of businesses and jobs in Idaho’s Treasure Valley.

   The Idaho Statesman continues arguing that “economic development – when well-executed and well-funded – helps create jobs that expand the county’s tax base.”  The implication is that the only correct method to enrich an economy is for the County Commissioners (the government) to partner with a special interest group such as the BVEP to make this happen by giving the BVEP tax money.

   But the real question is:  what about the free market?  What about individual rights and the freedom to direct your capital where you best think it should be spent?  The assumption that economic development cannot be “well-executed and well-funded” by voluntary exchanges of individuals in a free market instead of by the government is just a bunch of hooey.  In fact, it’s wrong both morally and economics-wise.

   The most important refutation against governmental intervention into the economy is that the act of intervention destroys the free market pricing mechanism, the very thing that is required for economic calculation and business forecasting.  And that, dear Readers, is why our economy is currently sitting around in a stagflated Depression:  too much governmental intervention.  The federal government, through the Federal Reserve, has inflated the crap out of the U.S. Dollar, intervened in all areas of the economy, especially banking and housing, and now insurance and cars, and thus instigated the destruction of all real market prices.  All commerce is rapidly coming to a standstill, and businessmen do not have a meaningful monetary tool, the real value of the U.S. Dollar, with which to calculate which way to go, which way to invest, whether a profit can be made, or how to move what’s left of real capital without getting stuck with fake Pulp Fiction Dollars being prodigiously pumped out by the Obama administration.

   Governmental intervention into the market, after destroying every nation’s currency, has brought the global economy to a standstill.

   The solution to job creation is not for the government to tax its citizens and dole out money to special interest groups.  In a free market, the people automatically create businesses and jobs without government intervention.  The only proper function of a limited republic is to provide and enforce objective laws to protect individual rights to freely give or exchange, not to redistribute legitimately earned wealth.  The referee, the government, should not participate in the business of the market for the same reason that football refs don’t get to play quarterback for either team in the 3rd quarter of the Super Bowl.

   The only true function of the County Commissioners is to uphold the Idaho and U.S. Constitutions.  If the citizens of Idaho and the rest of the United States were allowed to exercise their natural born rights, including the right to use gold or silver as a medium of economic exchange, today’s financial meltdown would rapidly resolve itself.  Neither the Ada County Commissioners nor the state or federal governments are capable of creating wealth by spending money.  They can only redistribute somebody else’s wealth and destroy free markets and thus individual freedom.  Wealth is produced by free-thinking and free-acting individuals, taking risks, and transforming ideas into time and labor saving devices or services.  The government is not a net producer of wealth, either directly or by re-routing other people’s money.

   We got into our current economic problems when the federal government dumped the gold standard, implemented fractional reserve banking, and then hyper-inflated the U.S. and global economies into today’s $680 Trillion of worthless toxic derivatives – 40 times our current GDP of $15 Trillion.  Until we get back to a medium of true economic exchange with real value, not today’s inflated Pulp Fiction Dollars, we will continue to experience all the parameters that typify a Depression.  If we do not get back to real value in our money, such as gold and silver backing, we risk civil and international trade wars, which, if history repeats itself, will escalate into full fledge military conflicts.

   The Statesman is correct in stating, “In turbulent times, job creation deserves our best effort.”  But that best effort is best solved with a free market, not the fairytale visions of socialist economics. – FM Duck

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