The Smartest People in the World™ are mostly cargo cultists. Today I found yet another article arguing that without yet another round of “quantitative easing,” the economy is doomed. We used to call it “printing money,” but that never seemed to work out. Hence the new label. Anyway — we were talking about cargo cults.
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.”
Well, no.
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.
Meanwhile: Obamacare, Dodd-Frank, 782 days without a budget from the Senate, impending tax hikes, a plummeting dollar, an Administration that is frankly hostile to free enterprise — the incentives remain to take no risks and avoid pain.
Start repealing laws and fix our broken entitlement system. Get Washington’s boot off the economy’s throat. Or as John Galt put it, “Get the hell out of my way!”
And while they’re at it, maybe they can stop accusing the Right of being the religious fundamentalists.
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