The economy is struggling. Politicians say: government must act. How can I help? I know. For my new Fox News Special (airing Friday at 9pm EST), I destroy some things.
Last summer, the administration did just that. They paid people $3,000 to destroy their older car and buy a new one. President Obama said it was a success. How far can I carry his logic?
Some guitar makers are struggling. If destroying cars was good for the auto industry, then I’ll destroy some guitars!
Because I destroyed this guitar, they’ll have to create new ones. That’ll create jobs. Maybe Jimi Hendrix was trying to stimulate the guitar biz when he set his on fire in 1967.
If destroying stuff is good for the economy, I wonder how much wealth I could create by causing an earthquake. It seems crazy to imagine a disaster like the Haitian earthquake could help an economy, but some people actually do imagine that. After the quake, Nancy Pelosi said: “I think that this can be an opportunity for a real boom economy in Haiti.” Likewise, after 9/11, Paul Krugman wrote in the NYT that:
The terror attack … could even do some economic good … Now, all of a sudden, we need some new office buildings … rebuilding will generate at least some increase in business spending.
People believe that nonsense because they can see the rebuilding, just as they can see showrooms buzzing with new sales from Cash for Clunkers. But Cato Institute’s David Boaz points out that: “What you can’t see is what people would have bought if the government wasn’t subsidizing the purchase of cars. Maybe they would have bought computers. Maybe they would have added a room on to their house. Maybe they would have put the money in their savings account to save for college. It’s very hard to see what isn’t done.”
Right. And politicians always favor the seen over those hard-to-see unintended consequences.
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