I hate to repeat myself, but sometimes (rarely, but sometimes) I’m just so gosh-darned right that my words bear repeating. Here are a few from June of 2011 I was reminded of by the impending fiscal cliff:
Cargo cults arose in the South Pacific during the Second World War. US soldiers and marines would arrive on an tropical island, and one of the first things they’d do was build an airstrip. Then the cargo planes would arrive and — Americans being Americans — our boys would share their loot with the half-starved locals. Candy, clothes, condoms, whatever.
The war eventually ended and the soldiers left and the cargo planes stopped coming. So the locals would make their own airstrips, using whatever tools they had — some quite elaborate. Then they’d stare at the skies and wait for the cargo planes to return.
That’s what quantitative easing is. “Print the money,” they say, staring at the skies, “and the goods will come.”
The goods must first be produced, and with the expectation of a profit. I know it’s fashionable for Paul Krugman to assert that “uncertainty is just a myth.” But this idea that there are Person Units called “Businessmen” who continue to produce goods no matter what government does to them is a liberal conceit. It’s the same liberal conceit that believes there are other Person Units called “Doctors” who will go on treating patients and finding new cures for diseases, no matter what government does to them.
People change their behavior as incentives change. And for the last three years, the incentive has been to hunker down and try not to get hurt.
But Krugman and the rest are immune to simple reason and plain facts, because they’re creatures of faith. They’re cargo cultists. Print the money and the goods will rain down magically from the skies.
We’ve tried that twice now. It hasn’t worked. And so the cargo cultists tell us that the gods are angry gods. We have not appeased them enough. We must print more money. We must have a third round of quantitative easing. That will make the goods appear.
We hearing the same argument now over federal spending: We have to keep printing checks to every Tom, Dick, and Harry, or the economy will implode.
I mean, yes. Yes, the economy is going to implode. Big Fat Washington is sitting on its chest, whacking it in the head with a big burlap sack filled with dollar coins and demanding to know why it won’t produce any jobs. This is after Big Fat Washington sicced the Lilliputians on the economy and then stole its wallet. Poor guy just can’t catch a break.
What I’m saying is, the money won’t mean anything — whether or not Washington is printing all the checks — unless the goods and services are being produced. But so long as Obama and the Chicago Squad remain in town, the builders and doers are going to stay just as hunkered down as they were last year.