When I was out in the provinces last month, I watched a bit of the BBC and SkyNews. One of the things I found humorous about the news coverage was the hyperventilating about Brexit. Every story had a Brexit angle, even the local interest stuff. The general impression I got from the news presenters was that they were having a tough time keeping it together. At any moment they could break down into sobbing over the horrors of Brexit. If you did not know better, you would think Brexit was code for re-opening Auschwitz.
All the prophesies about the disasters that would befall the world, if the snaggletoothed yokels voted to leave Europe, have not come to pass. In fact, the early returns suggest it has been a net positive for the Brits. Time will tell how it all unfolds as there is a lot that has yet to happen. Even so, the results thus far are making the Remain side look rather foolish. Instead of accepting this reality, the true believers are carrying on like Godzilla is about to cross the Channel and attack London, because of Brexit.
This inability to accept reality is not confined to the Brits. Tyler Cowen has an unintentionally hilarious column up demanding that we believe the libertarian economists and not our lying eyes. The short version, for those uninterested in reading it, is that he and the rest of the doomsayers forgot to carry the one and the day of reckoning is actually a little ways off. But don’t you worry though. The day of reckoning is approaching and those beastly Dirt People in the accompanying picture will be held to account.
In fairness to libertarians, modern economists are not libertarians. They dress up their act with libertarian hobbyhorse items like free weed and open borders, but modern economics is managerial central planning. They are technocrats convinced they can micromanage everything through monetary and tax policy. No matter how many times they get it wrong, they remain certain they just need to tweak their models and boundless bliss will spread over the countryside. Worse still, they fully embrace the lunacy of homo economicus.
Economics, as I’m fond of saying, is the modern equivalent of astrology. Before a battle, Cyrus II of Persia would bring in his astrologers to advice him on the time and place to attack his enemy. The astrologers would figure out what he wanted to hear, consult their maps and then tell him what he wanted to hear. Cyrus was a bad ass dude, who was rarely wrong, so it was a wise course by the astrologers to tell the boss what he already knew. When he won, they got some credit and they avoided contradicting the boss.
This old story about the eminent
astrologer economist Joseph Stiglitz praising the economic polices of Venezuela ten years ago is a good example. Stiglitz was telling his hosts what they wanted to hear because they were paying him to endorse their brand of lunacy. Of course, Venezuela is now headed to total collapse because their economy has ground to a halt. In an age when Mexico’s poor people are obese, Venezuela has managed to have a food shortage. Maybe the rulers should not have listened to Joseph Stiglitz.
The fascinating thing about economists is that their error rate is outlandishly high, but they never lose credibility with the rulers. Obama called in his best seers when he rose to power in 2008. They told him that borrowing a trillion dollars and blowing it on pointless projects would result in 1.5 trillion in economic activity. They called it the fiscal multiplier. One could be forgiven for thinking that this is another version of this old joke about a stranger coming into town and spending $100 at an hotel, then changing his mind.
The Obama stimulus plan was a bust, but that was never really the point anyway. Obama wanted to lavish his party with your money and he wanted to make it look like he was doing you a favor by doing it. That’s why he called in his best magicians and astrologers to give it their stamp of approval. Being right or wrong was never a concern. It never is in economics. The chief architects of the stimulus knew it was a great career move to give their stamp of approval to what was obviously just good old fashioned patronage. All of them landed prestigious jobs in the academy and Wall Street afterward.
Anyway, I suspect the fury of the central planners over Brexit has to do with fear that the scam is no longer working. Every big foot economist from the West weighed in against Brexit. They shook their staffs and promised Britain would be visited by plagues, monsters and dark spirits if they left Europe. The voters chose Brexit anyway. If you’re in the business of fooling the people on behalf of the rulers, you need to show you can fool the voters. Otherwise, the rulers have no use for you.
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