Fixing the Economy

"Fixing the economy" is a notion so absurd that only a certain species of economist could possibly take it seriously. The root of this nonsense is the planner's pipedream of economic calculation, so we have an absurdity built upon an absurdity. The present meltdown is classic. People with a planning agenda, in this case an agenda of creating universal home ownership, manipulated things to insure that normal market discipline could not operate. As the resulting distortions accumulated, patches were plastered on here and there, pathetic little fingers were stuck into the multiplying holes in the dike. Now that it's all crashed in an inevitable cascade of failure, they are frantically trying to shore up the mess with actions that will almost certainly cause immense additional damage. What's required is a truly enormous quantity of sheer luck, and that ain't likely.

The single, shining truth here is that nobody has any hint of a clue about what they're doing, but political survival requires that they do something. When people are forced to operate in that kind of ambiguity, where it is impossible that they could actually understand what they are dealing with, they always seek the shelter of a false consensus. Certain opinions get some support, and those quickly become the port in the storm to which everyone flocks. Those ideas begin to be treated as if consensus about them somehow magically turns them into real facts about the world. They aren't. But this compounded ignorance now coalesces into bold policy prescriptions that will, with almost perfect certainty, make things worse either immediately or down the road. The Greeks knew that hubris always ends badly, and they were right. This article is a keeper.

Byron