Tuesday, June 12, 2012

What Limbaugh Was Trying to Say

"I'm still not nailing this" Rush Limbaugh said on his program yesterday concerning the issue of policemen, firemen, and teachers and whether we need more of them to aide in economic recovery.   And indeed he wasn't.    I am not a big Limbaugh fan as a policy guy, but he is a great entertainer.   So let me see if I can say what he was trying to say and should have said:

Firemen and policemen are very important, and so are teachers.   But adding more of them will not produce an economic recovery.   That's because the first two groups don't create wealth, their job is to protect the wealth which others have created.   Teachers, if they are doing their job correctly, can indirectly create wealth in the long term by maximizing the intellectual capacity of the next generation, but the lag time on such benefits can be decades in the future.  And of course, I would argue that federal mismanagement of education, a job for which the Constitution gives the federal government no role whatsoever, has reduced rather than enhanced the efficiency of education in that long-term wealth-producing role.

If the bottleneck in our economy was destruction by fire then adding more firemen would help.   That is to say, if the bean makers said "I am not going to invest in increasing bean production this year because half the time a fire comes along and burns them up anyway" then adding firemen would help.    If bean makers said "why invest in making more beans because thieves are probably just going to steal them anyway" then adding more police could help.   As we will see, that is happening, but because of the identity and operating methods of the thieves, adding more police will not reduce their criminal behavior one iota.

That leaves teachers.   I taught myself for many years.   I am sympathetic to teachers, but adding more teachers will not help this economy.   If there are no jobs, it does not matter how well-educated people are.   Half the waiters and waitresses in town have college degrees.  It is shortcomings in other factors of production that is holding us back.  The supply of formally educated workers is not the bottleneck in this economy, and therefore adding more of them or those who help train them will not help this economy.

To simplify, let's look at producing wealth as making beans.   Some people make the beans, some get them to market, and some sell them.   All that produces wealth because it helps the free market mechanism of voluntary exchange which leads to win-win trades.    Other people guard the beans.  They have an important job, but until bean theft (or loss from fire) reaches levels that a significant slice of people quit making, distributing, and selling beans because of that theft (or fire loss) then they really don't help add any new beans to the economy.  

Again, don't misunderstand me, when bean thieves are about or the fires are raging, they preserve not just beans, but us bean-makers as well!   But the drag on our economy is a special kind of bean thief.   The fires which ravage our economy are metaphorical.     The government itself is the bean thief, along with the financial interests which have captured a lot of our government.      Adding more police to watch us won't help, because the real stealing of beans that discourages people from doing the work needed to make more beans is being done by the government itself.

Even stealing more beans to add more cops won't help the economy, because those cops are not about to arrest the real crooks.     More fireman cannot put out the metaphorical fires of financial ruin the predatory banks have unleashed.   Better educated minds have little opportunity to put their creativity to work in an economy which lacks the other inputs necessary to create wealth.

A lack of policeman, firemen, and teachers is simply not the bottleneck in this economy.   Debt is.  We have a financial system loaded with bad debt, but because that debt is also counted as "assets" by the richest and most powerful entities in the world, they are forcing the political system to treat this bad debt as if it had full value.    Until they allow the market to liquidate the bad debt at its real value, economic recovery will not occur.  Excess debt and bad debt is plugging up economic growth.    The plan now seems to be to shift as many of those bad debts as possible on the backs of the taxpayers, and only then let the true lack of value become known.   Rush Limbaugh was not trying to say this part, because he either does not understand it or because the people he is working for do not want his audience to understand what is really going on.

Those who protect wealth have a noble calling, just as those who produce it do.   But there is also a class of government employees who neither produce beans nor protect them.   Their job is to redistribute the beans that others have produced and protected.    They take the beans from those who earned them and give those beans to others that the government feels ought to have them more.  For instance Resident Obama decided that former ACORN director Joe McGavin should have $445 million dollars worth of beans to redistribute.   ACORN of course is infamous for its level of corruption under McGavin.      He is supposed to use the money to help underwater home owners in Illinois pay their mortgage.

Wait a minute Mark, isn't that helping to "liquidate the bad debt" as well as help those poor homeowners?   No.  It's another welfare program for the giant banks.  The bad debt isn't being liquidated, its being payed off with tax money.  If the bad debt was liqudated banks would be stuck with either nothing or homes worth less than is owed on them. To prevent them from having to take a loss due to their own poor decision-making they are propping up the bad debt by taking $445 million dollars, minus whatever McGavin is going to steal, from us bean makers and giving it to the banks through these poor home "owners."     Meanwhile if they really wanted to help people become homeowners they would let the prices fall to their market level instead of propping prices up on the backs of the taxpayers in order to keep the foreclosing banks from taking a loss.

Again, the financial interests who have captured our government simply won't take the hit for the mal-investments they have made.   They are passing the costs onto us bean makers with the help of government bean re-distributors who pretend it is being done to "help the poor."    It is very discouraging for us bean-makers when we go to all this trouble to make beans, and the government comes and takes $445 million dollars worth of them away from us in order to give it to a politically connected redistributor who is really funneling the money to financial elites that want to shift the costs of their mistakes onto us.


Blogger Mark Moore (Moderator) said...

Rush Limbaugh said he was not nailing down what was wrong with Obama's plan to recover the economy by adding firemen, policemen, and teachers. Let's see if I can nail it....

2:00 PM, June 12, 2012  

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