Wednesday, August 5, 2009

Making a desert and calling it a stimulus

Congress and President Obama are all excited about putting a couple of billion more dollars into their "Cash for Clunkers" program because the auto industry is all excited about it. And, truth to tell, the "Cash for Clunkers" program is probably less destructive and wasteful than most of the stuff congress and the president have done for us this year, which is really saying something.

"Cash for Clunkers" gives people $4,500 of your tax dollars if they trade in an old American made car that gets poor gas mileage and buy a new (usually) Japanese or Korean made car that gets better mileage. It's a requirement of the program that the dealer where they trade in the old American car has to destroy that car. He can't re-sell the car, and he can't even break it up for parts. He has to destroy it so thoroughly that the only thing that can be done with it is to melt it down for scrap.

So what the government is really doing is paying people to destroy cars that still run and could still be useful to someone who doesn't have a lot of money to pay for a car but still wants to be able to get around.

Which is a pretty profoundly stupid thing to do when you think about it.

But it's not as though President Obama and Nancy Pelosi and Barney Frank and Chris Dodd and Arlen Specter are the first imbeciles to think that destroying useful assets is a good idea. It's absolutely certain that back before a fellow named Frederic Bastiat wrote about "broken windows" in 1850 a lot of stupid people were thinking in the same obtuse way President Obama and his ilk think.

Stupid people have probably always thought the same way. For instance, a whole lot of people, all through history, have thought that war stimulates economies because governments spend their time destroying things, and spend a lot of money having people build things that are only useful for destroying other things. The twisted logic behind thinking that war is a good way to "stimulate" the economy is exactly the same twisted logic that lays behind the "Cash for Clunkers" program.

By that logic the Mohammedan fanatics did us a big favor when they crashed planes into the World Trade Center. And the Japanese did us a favor when they attacked Pearl Harbor and destroyed the U.S. Pacific Fleet. And the Germans did us a favor by using submarines to sink thousands of our merchant ships in the Atlantic. And, in our turn, we did the Japanese people a couple of spectacular favors when we nuked Hiroshima and Nagasaki, just as we did the German people a favor when we fire bombed Dresden.

And, so it goes. By the logic of "cash for clunkers" Napoleon did the Russian people a favor when he ravaged half their country and burned Moscow in 1812. Similarly, those old timey Romans were actually doing a favor for the Gauls and the Germans when the "made a desert and called it peace" as Tacitus wrote way back in 90 or so A.D.

Heck, by the logic of destroying assets to stimulate the economy President Obama doesn't even need congress to stimulate the hell out of the world economy. He could do that all by himself just by calling in the guy with the briefcase and ordering the launch of a few dozen or a few hundred nuclear missiles. The Chinese and the Russians and the others won't mind if he just calls them first to explain that he's doing it to stimulate their economies. And during the call he could ask them to please launch some nuclear missiles at our cities to stimulate our economy.

You're thinking, of course that doing that would be very dumb; but it would be no dumber than paying people to destroy cars. Destroying drivable cars to stimulate the economy is just plain dumb, so dumb that only a college professor with his head way up his backside or a politician with his backside way up in the air and his feet practically levitating off the ground could possibly think it's smart.

You can read about Bastiat and his answer to the broken windows idea of economic stimulation here:

As for me, I'm going out now to break some windows to stimulate the economy.

Update: It just struck me that the "Cash for Clunkers" program has a major flaw which President Obama and congress should fix. The dealers are being allowed to sell those wrecked cars for scrap. That is causing the economy to fail to get the full benefit of destroying the cars in the first place. Those cars should be thrown into the ocean so that the steel and aluminum and copper in them can never be used again. That way the primary metal producers and the miners would also get a big stimulus since new steel, aluminum and copper would have to be made from scratch.

I have to remember to get rid of my recycling bin. From now on I put the bottles and cans in the regular trash so they can never be used again. Everyone has to do their bit to stimulate the economy.

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