Some Thoughts on What We See and Don't See; OR How I Learned to Stop Remembering and Forget History

A sign at the Dachau Concentration Camp museum reads, "Those Who Forget History Are Doomed to Repeat It", and below it a photograph of a pile of dead bodies. The result of Nazi extermination.

 ~

I've been reading Henry Hazlitt's Economics In One Lesson (I'm not sure why I am on this one now, I seem to start with the big, 700+ page books like Human Action instead of starting small and working my way up. Perhaps I'm just a glutton for punishment).

Anyway, I am always struck by how timeless books like Hazlitt's are. They repeatedly surprise me as works that could be just as easily applied to our current situations as they were when they were first published.

Take the 2nd chapter in EIOL (I'm using that abbreviation because I'm lazy and I don't have an editor). In this chapter, Hazlitt renews Bastiat's essay concerning the "Broken Window" fallacy in economics. This fallacy seems to be the root of many government interventions in our economy.

Take, for instance, this $1 billion bonding bill of a crap sandwich being fed to us by those in St Paul. Supporters of this bonding bill, such as, Paul Thissen, assert that if we (the government) spend a lot of money (like $1 billion) then that spending results in jobs, which results in people being able to spend their earnings on, well, "stuff". That spending on that "stuff" perpetuates the growth of the economy. The problem with this is that this $1 billion needs to come from somewhere and be financed and paid by something (TAXES). When the people have to repay this debt through taxation they are prevented from spending it on "stuff" that would further grow the economy. Essentially, that $1 billion may create some work for people to do, but it also prevents it from being spent on something else. To better analogize this, imagine taking a handful of dirty, sweaty, crumpled up dollar bills from your right pocket and putting it in you left pocket. All that you have done is transfer that money from one place to another, you haven't gained or lost anything. Nothing has been created. The same goes for massive spending bills like this (or any spending for that matter), work may be created for some, but it is also taken from others because the money being spent must later be paid for through taxation.

If you want to know if one of these politicians is full of B.S. ask them why they proposed $1 billion for this bonding bill. Heck, if $1 billion will create enough jobs to get our economy humming again, why not $2 billion? Why not $10 billion? At $10 billion our economy should be taking off like a rocket. Imagine, we could all look like this guy (or girl). Ask them which hack-economist told them that $1 billion is the "just right" amount to get our economy motoring along again. Perhaps it's this guy. One would think that the amount borrowed would have been prescribed to be a more exact, less rounded number, like $989, 413,607.00.

This path is really nothing new. Heck, this bonding bill is really just a miniature version of the federal stimulus bill passed last year. The Obama administration claimed that if the stimulus was passed unemployment would top out at 8%. Well, here we are, 1 year later, and we're hovering around 9.7%.

Why would we want a mini-stimulus in our own state if the grande version failed so miserably at the Federal level? Because we simply fail to remember and learn from history. This sales technique is really nothing new. Nixon tried it, Ford tried it, Carter tried it, and what did we get? The 70s, that's what we got. Aside from a Hollywood renaissance and Zeppelin, the 70s were nothing to write home about.

Remember, those who forget history are doomed to repeat it.