'The idle contentions of paradox mongers'
Fallacious economic beliefs long have had a stranglehold on the American people. Blame what you will — a public education-fueled critical thinking deficit, unwavering fealty to unsustainable ideologies, dishonest politics and self-serving and -dealing politicians — but they so permeate society that too many of these shibboleths, sadly and tragically, have become articles of faith.
The social justice crowd peddles a higher and higher minimum wage to supposedly raise the lot of the “working poor.” Never mind that artificially dictating a wage floor, one that's not based on productivity, only raises the cost of doing business, resulting in fewer entry-level jobs for those who need them most.
Think of organized labor, which, in the name of “progress,” markedly inflates the cost of public works projects through extortion (“project labor agreements”) and discrimination (only the union-represented need apply). Such practices are sanctioned and protected by the same government that, per the rule of law, prosecutes private-sector enterprises engaging in the same behavior.
Government “stimulus” can “prime the pump” and turn a depressed economy into one robust? The New Deal, the Great Society and the “hope and change” of Obamanomics disprove that nostrum.
And the list goes on and on.
Hurricane Sandy revived another tall tale — that there's an economics benefit in disasters.
As the Los Angeles Times put it, citing the consulting firm of Challenger, Gray & Christmas Inc., the “silver lining in all the destruction” is “that such storms tend to provide a boost to the economy in their wake” — “a surge in employment construction and skilled trades and a boost in spending as companies and homeowners replace damaged equipment and household items.”
Or as USA Today reported, “(P)roperty damage will be repaired and lost economic output will largely be offset by other increased activity as residents rushed into stores to prepare for the hurricane.”
Or as University of Maryland economist Peter Morici put it in one column, the “more modern and productive” infrastructure that will replace the hurricane-damaged infrastructure minimizes the net negative economic impact.
Never mind that none of this is true, economics scholar Don Boudreaux reminded me that such claims are “as predictable as wet sidewalks during a thunderstorm.” And he exposed the audacity of the premise in a letter to The Philadelphia Inquirer:
“If Professor Morici is correct, then surely he also applauds, say, the economic consequences of drunk driving. As with hurricanes ... he can bemoan the loss of life ... and then get on with explaining, paradoxically, the economic benefits ... . After all, drunk driving creates unnecessarily large numbers of destroyed automobiles to replace, damaged automobiles to repair, dead victims to bury and injured victims to be cared for by first responders, doctors, nurses, physical therapists and hospital administrators and clerks.”
It is, Professor Boudreaux reminds, quoting English jurist A.V. Dicey, “‘the idle contentions of paradox-mongers' — predictions that are just clever enough to strike economically uninformed people as being profoundly insightful.”
Or as Nita Ghei, an economics law scholar, reminds in The Washington Times:
“A natural disaster ruins infrastructure, diminishing the national stock of capital. So if growth takes place as a result of the rebuilding effort, it would only be growth on top of a diminished baseline.
“A higher growth number would not reflect an actual increase in prosperity,” Ms. Ghei writes. “The process of rebuilding merely returns us to square one.”
Bottom line: “Property destruction never creates wealth,” says Brad DeVos, executive director of The Bastiat Society, devoted to educating the public about the long-ago wise words of French political economist Frederic Bastiat.
Put even more simply, you can't create economic prosperity by running around smashing windows. And that so many people, many of whom should know better, steadfastly think otherwise is as great a threat to our national security as any threat there is.
Colin McNickle is Trib Total Media's director of editorial pages (412-320-7836 or email@example.com).