You Can’t Take the Effect and Make it the Cause

I guess you have to have a problem if you want to invent a contraption…

Comrade Obama

In order that he might achieve something, Obama first wrote two memoirs and aquired a Nobel Prize.

If you want to know why the great depression was so great check out this post by Scott Sumner (he’s kind of like Paul Krugman but from Chicago… and without a Nobel prize).  It calls to mind John Galt’s speech from Atlas Shrugged.

“Whenever you rebel against causality, your motive is the fraudulent desire, not to escape it, but worse: to reverse it.  You want unearned love, as if love, the effect, could give you personal value, the cause–you want unearned admiration, as if admiration the effect, could give you virtue, the cause–you want unearned wealth, as if wealth, the effect, could give you ability, the cause–you plead for mercy, mercy, not justice, as if an unearned forgiveness could wipe out the cause of your plea.  And to indulge your ugly little shams, you support the doctrines of your teachers, while they run hog-wild proclaiming that spending, the effect, creates riches, the cause, that machinery, the effect, creates intelligence, the cause.”

In a free market, higher output would cause higher wages and lower unemployment. Higher investment supply would cause lower interest rates.  The Keynesians and progressives try to create higher output by raising wages, and “creating” pointless jobs and stimulate investment by lowering interest rates.  If you wanted to learn to ski would you go buy a gold medal and then hit the black diamond runs?  If you do you will most likely end up poor and crippled like some economies I know.