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FROM THE PHONE BOOTH: The Smallest Space in  Hollywood

	FINEFROCK

MacOnomics 101:
‘Cat’ Into Hazlitt, Shlaes, Sowell & O’Rourke
by Steve Finefrock - Hollywood Forum [scriptwriter] 3/13/08

Put down that tome of economics, Senator McCain. It’s too late to absorb so much in so little time you have left to ‘understand’ economics. My suggestion starts with a mix of quotes and recommending a few conservative economic brainiacs who are effective at translating this arduous art of economics, sometimes called the dismal discipline, into hors d’ouevres, such as P.J. O’Rourke’s “Eat the Rich” and his more recent review/assessment of Adam Smith in his own lighthearted “Wealth of Nations.” P.J. most famously has observed what is one of many pithy pontifications which Mac needs to tattoo on his eyelids:

Giving money and power to government is like giving whiskey and car keys to teenage boys.

Alternating this humor with the most concise elaboration of his very elaborate lifelong thesis is Milton Friedman’s quip when a wiseass reporter [yes, it is a redundancy] attempted to trick him with a request for a simple sentence to summarize his view.  Simple, said Milton, unfazed by the gauntlet thrown to his face:

There is no Free Lunch.

The single most exciting thing you encounter in government is competence, because it’s so rare.

In Ben Franklin’s time, his adage “A penny saved is a penny earned” would be insufficient for today’s tax rates. Now, a penny saved from careless expenditure is worth a penny-plus over the ‘earned’ penny, which will be taxed at up to 50% [state plus federal, and sometimes local taxes].  Ole Ben also noted, long before the Sixteenth Amendment, the IRS and ‘progressive’ taxation, a prescient attitude:
 
It would be thought a hard government that should tax its people one tenth part.

Pericles’ ancient advice would have been useful for Microsoft to have grasped:

Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you.

Add the so-called Great Chief Justice’s pronouncement in an early case establishing reciprocal tax immunity of the states and the federal government, long before the income tax expanded greedy government’s reach into our pocket.  John Marshall doubtless didn’t realize how damaging taxes might become when he said:
 
The power to tax is the power to destroy.

Among other more digestible texts is the first few chapters of Harry Hazlitt’s “Economics in One Lesson” [note: not ‘easy’ lesson], especially his opening on the parable of the broken window. It would behoove Mac, and his team, and all Americans, to absorb that tale of a baker’s display window, broken by vandals, requiring him to ‘create’ work for the glazier and glass store, much to the satisfaction of the public who can watch and thus actually see the ‘good’ the expenditure has supposedly created. What the gleeful sidewalk observers do not know [for it is not before their eyes as street watchers] is that the baker spent money for the repair which he had hoped to put to a new suit and shoes.  Thus, the public could see the ‘good’ done for the glazier, but did not realize that there was merely a transfer of funds, and thus transfer of a job from the tailor and cobbler to the glazier and glass store. No job created at all – but the choice of the baker was forced away from enjoying new shoes and a nice suit.  
 
Something FDR never grasped, as demonstrated in Amity Shlaes’ book, “The Forgotten Man” – that man being the entrepreneur, forgotten by the wealth-transfer mania of FDR and those who took credit for ‘creating’ jobs by way of that Giant Sucking Sound of high taxes and huge borrowing. And still take credit for ‘creating’ jobs by taxation and borrowing schemes.
 
One of the great brainiacs of economics today is Thomas Sowell, an ideological and intellectual twin to Walter Williams. Sowell’s columns alone should be catch-up reading for Mac, and all conservatives who wish to get a grasp of this vital center of our politics.  Sowell has caustically commented:

People who know nothing about advertising, nothing about pharmaceuticals, and nothing about economics have been loudly proclaiming that the drug companies spend too much on advertising – and demanding that the government pass laws based on their ignorance.

Paramount among all economics laws is that SUPPLY IS LIMITED, DEMAND IS LIMITLESS [indeed, virtually infinite]. At any given moment, the economy can produce a fixed amount of goods and services from labor, land, capital and entrepreneurial skills [the four ‘factors of production’]. But us folks wants it all – two cars, then a third, then a boat, then a boathouse, then a summer home, and eating out more often, buying higher-status foods and cars, and clothes.  Ad infinitum – but no infinity and beyond for the supply to match that endless yearning called demand by economists
 
Add to that law, YOU GET MORE OF WHAT YOU SUBSIDIZE, AND LESS OF WHAT IS TAXED, and we better understand welfare, as well as wasted farmland used for tax-subsidized ethanol. One economic insight comes from Andy Rooney, America’s grouch-in-residence at CBS, and a reputed liberal:

I believe the money I make belongs to me and my family, not some governmental stooge with a bad comb-over who wants to give it away to crack addicts for squiring out babies.

Yep, that was lefty Andy, finally growing up a wee tiny bit, if only briefly.
 
Friedman tell us, as summarized by O’Rourke in “Eat the Rich” that you can spend money only four ways, and each method produces drastically different results: 

Spend your money on yourself [and those under your care];
Spend your money on other people;
Spend other people’s money on yourself [and those under your care];

Spend other people’s money on other people [Rooney’s example fits here].
 
The first gets the optimum mix of price and quality; the last produces the worst combination, the province of burrocrats spending money confiscated from strangers, on behalf of ‘good works’ devoted to total strangers. MacOnomics requires one to grasp one flaw, as described by James Bovard:

Democracy must be something more than two wolves and one sheep voting on what to do for dinner.

One way for the sheep to deter the wolves is to donate to the wolves’ political opponents – which may be a tough pill for Mac to swallow. No tougher than he’s finding his now cash-poor presidential campaign needing higher contribution limits.
 
Even a lefty like ole George Bernard Shaw knew one little insight:

A government which robs Peter to pay Paul can always depend on the support of Paul.

And another reason for ‘petitioning government for redress of grievances’ is an economic right and vital core of American rights. Peter should have unfettered right to keep Paul’s greedy hand from continuing to pick his pocket via government.
 
Walter Williams, Sowell’s twin [two black conservative economists? Our cup runneth over], constantly hammers his Basic Economic Truth:

Reaching into someone else’s pocket to assist one’s fellow man hardly qualifies as charity.

Or to add my own variation on “pretty is as pretty does”:
 
Compassion is as compassion does, with your OWN MONEY FIRST.

And Lenin observed so ruthlessly:
 
The way to crush the bourgeois is to grind them between the millstones of taxation and inflation.

Maybe add regulation, litigation and general agitation of government.
 
Again from Walter Williams’ wisdom:

The crucial question for any policy is not what are its intentions but what are its effects?  

Long years ago we get this from Honore de Balzac, which would get a nod from Moynihan: 

Bureaucracy is a giant mechanism operated by pygmies.

More recently, Wall Street Journal’s Paul Gigot insists:

The era of resisting big government is never over.

And back to P.J. O’Rourke:
 
If you think health care is expensive now, wait until you see what it costs when it’s free.

Back to subsidy equals more, which includes more inefficiency and greater waste. Ending with Thomas Paine, whose phrase is the source of Amity Shlaes’ other book [on history of taxes in America], entitled “The Greedy Hand”:

Beware the greedy hand of government, thrusting itself into every corner and crevice of industry.

This is the challenge for Mac’s economics – learn it simple, put down the giant econ text, and absorb the economic basics in little bitty bites.  Have a laugh via P.J. O’Rourke’s two lighthearted works, skim Hazlitt’s first few chapters, sample Williams and Sowell’s regular columns – just get to it, just Do It.  Maybe have a bi-weekly roundtable of those three, maybe add Arnold Kling of TechCentralStation.com, and make econ fun.  Once, Williams sub-hosted for Limbaugh, with his first full hour devoted to a one-on-one with Sowell.
 
Maybe it’s the best hour in radio.  Rush should copy that tape and send it to Mac – it could be his first digestible hors d’ouevres on economics, to play in the limo or plane between stops.  Without the subject being dismal, or dull, or depressing.  It’s overdue for him to ‘cat’ into this subject – catapult like his Navy fighter did from the flightdeck of his carrier steaming at Yankee Station off Vietnam.  This is a crucial subject; he do need to understand a few things about political economy, for the first book on the subject, Adam Smith’s original “Wealth of Nations” was published in that same seminal year of our Declaration of Independence.
 
Coincidence?  Hardly.

copyright 2008 Steve Finefrock

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