Obama and the Cherry Tree

Monday, October 28, 2013

It isn't just those who are ignorant of history who are doomed to repeat it. Those who ignore it or misinterpret it badly enough can, too. The New York Times reports that inflation is once again all the rage among central planners. Notice that current crop of officials appear to be combining the aforementioned biases by cherry-picking:

Lately, however, the 1970s have seemed a less relevant cautionary tale than the fate of Japan, where prices have been in general decline since the late 1990s. Kariya, a popular instant dinner of curry in a pouch that cost 120 yen in 2000, can now be found for 68 yen, according to the blog Yen for Living.

This enduring deflation, which policy makers are now trying to end, kept the economy in retreat as people hesitated to make purchases, because prices were falling, or to borrow money, because the cost of repayment was rising. [links in original]
Fortunately, for anyone interested in helping voters get up to speed on the truth, we have Ayn Rand and Thomas Sowell.

Ayn Rand did a nice job of making inflation intelligible to an ordinary person decades ago through a thought experiment, which I quote here in part:
[P]roject what would happen to your community of a hundred hard-working, prosperous, forward-moving people, if one man were allowed to trade on your market, not by means of gold, but by means of paper--i.e., if he paid you, not with a material commodity, not with goods he had actually produced, but merely with a promissory note on his future production. This man takes your goods, but does not use them to support his own production; he does not produce at all--he merely consumes the goods. Then, he pays you higher prices for more goods--again in promissory notes--assuring you that he is your best customer, who expands your market.

Then, one day, a struggling young farmer, who suffered from a bad flood, wants to buy some grain from you, but your price has risen and you haven't much grain to spare, so he goes bankrupt. Then, the dairy farmer, to whom he owed money, raises the price of milk to make up for the loss--and the truck farmer, who needs the milk, gives up buying the eggs he had always bought--and the poultry farmer kills some of his chickens, which he can't afford to feed--and the alfalfa grower, who can't afford the higher price of eggs, sells some of his stock seed and cuts down on his planting--and the dairy farmer can't afford the higher price of alfalfa, so he cancels his order to the blacksmith--and you want to buy the new plow you had been saving for, but the blacksmith has gone bankrupt. Then all of you present the promissory notes to your "best customer," and you discover that they were promissory notes not on his future production, but on yours--only you have nothing left to produce with. Your land is there, your structures are there, but there is no food to sustain you through the coming winter, and no stock seed to plant. ["Egalitarianism and Inflation", in  The Ayn Rand Letter, no. III, vol. 19, pp. 338-339]
But the above is almost made to look superflous in the face of historical evidence analyzed with the goal of understanding what can cause a nation to prosper (vice what can make printing money look like a good idea), as Thomas Sowell demonstrates:
[Federal Reserve Chairman nominee Janet Yellen's] first question, whether free market economies can achieve full employment without government intervention, is a purely factual question that can be answered from history. For the first 150 years of the United States, there was no policy of federal intervention when the economy turned down.
And, much later:
Under Calvin Coolidge, the ultimate in non-interventionist government, the annual unemployment rate got down to 1.8 percent. How does the track record of Keynesian intervention compare to that?
Earlier, Sowell reminds us of a term we might soon need to take from the shelf and dust off: "stagflation". (Astoundingly, even the Times brings it up -- before trying to help us forget it.) So long as Obama is in power and voters don't mind this kind of thinking too much, we are at the very least in danger of this problem recurring. Fortunately, we can work to show that he and his big government cronies are wrong by spreading the word.

-- CAV


Steve D said...

I’d take it one step further. Even more important than doing interesting things is thinking interesting things. One reason I like to write; I got tired of the same old cliché personalities doing the same old cliché things in books, television and movies. Eventually all the characters seem to merge into one (or small number of) amorphous blob personalities. Better to create something different, fresh – a new type of hero, new types of situations or twists on standard ones - and I get to read it afterwards :). Let the characters do the unexpected. If others want to read it as well, that’s a bonus but not the main purpose.

If you have a really good plot – a little excessive wordiness and/or awkwardness will probably not be noticed. In my opinion a good example of this is James Dickey (Deliverance), even Victor Hugo to a degree. Style and grammar are more easily fixed.

Many of the aspiring writers I’ve worked with seem to drill over the same standard situations or have difficulty laying out an interesting plot or if they do have a decent main plot no subplots or twists. Often they hammer too closely on what they know well, thereby boring the reader.

In my opinion, the secret to good writing is good thinking. You can’t tell a story well until you’ve come up with a good story to begin with. That’s the hard part. I see the same types of issues with non-fiction. You need to have an opinion and be clear why you have that opinion before communicating it to others.

Writing is a conversation between the writer and the reader. If the reader is yelling into his book at the character; ‘Hey, don’t do that!’ you’re off to a good start. On the other hand, rather than the reader screaming at the page, he could write one himself, and make sure his character; ‘doesn’t do that.’

Gus Van Horn said...


You plainly meant to post this elsewhere. I'll repost it there.