The Supply and Demand for Idiots
Maybe "idiots" is too harsh...well, maybe not
When it comes to the current economic crisis, conservatives and Republicans argue (stupidly) that it resulted from excessive state intervention in the economy, with the government forcing banks to lend to people who couldn’t afford it. Meanwhile, liberals and Democrats argue (stupidly) that it resulted from the “Bush economic policies” whatever that means. Listening to this back-and-forth, one would think that the issue is whether (1) a few percentage points off the top marginal income tax rate, or (2) some bad loans to poor people are responsible for a worldwide meltdown that saw the Dow Jones lose half its value in a matter of months, millions of people lose their jobs, and hundreds of billions of dollars of global wealth evaporate. As usual, the Republicans and Democrats give us a fascinating and inspiring debate.
Most of the Republicans and Democrats couldn’t explain what GDP means if their life depended on it (GDP? Is that a lobbying organization I should be aware of??), much less the concepts of marginal utility, equilibrium price or opportunity cost—all of which are fundamental ideas in economics. But they sure could give you a lecture on why “socialism” is so evil that it is the economic system that runs the fourth circle of hell. (Never mind the fact that we’ve been successfully using it in the US for decades.) Or that we need urgently to start a new government program to hand out money to some obscure segment of society—even if it means bankrupting the treasury!
Normally, a recession of this magnitude would prompt some serious soul searching on all sides of the economic policy debate. We would see real questioning of deeply-held assumptions on the part of economists and the field of economics in general. We would see both left and right take a good, hard look at the kinds of policies they stand for, and the real-world consequences those policies have wrought.
Instead, we see the same old, same old. It’s politics as usual—socialist healthcare this, Fox News that—and continued economic know-nothingness all around. The UDA (unmitigated debt agenda) liberals are losing support, and the Republicans are starting to gain ground. Great. I can’t wait to trade one philosophically bankrupt party for another.
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