$787 billion worth of fiscal stimulus to get the economy back on track, and the best volley Conservatives can lobby is that it didn’t work. With the Obama administration’s widely off-the-mark estimates as to the unemployment rate with or without the stimulus (the actual job losses exceeded the estimates without the stimulus), the debate now centers around whether the stimulus did any good or if we’d have experienced even worse job losses without it.

If only the worst thing that could be said about the stimulus bill was that it did nothing: its pernicious effects are far worse than any politicians or pundits seem to realize. Both sides of this debate entirely miss the point. The failure of the stimulus bill is not that it didn’t create or save jobs – It may or may not have in the short term, but this fact is irrelevant – it is that we are setting ourselves up for a worse crash in the future.

Why do recessions happen? It is not a random occurrence that occasionally besets Capitalist economies: it is the result of malinvestment realized too late. Because the capital which has been invested in can only be sold at a net loss or converted to more valuable capital at great cost, once people realize they’ve been investing in the wrong things, they have to take a hit.

Individual malinvestments are extremely common in the market – imagine the businessman whose business ventures fail time and time again. Anyone who loses money on the stock market has made a malinvestment – and the market is generally resilient to this sort of isolated malinvestment. So what causes so many people to malinvest in tandem such that we get a recession?

Price distortions.

Now the perniciousness of the stimulus bill starts to become evident. The goal of the stimulus bill is to stimulate “aggregate demand” so that we can return to “full employment”. These terms obscure the nature of the situation. The reason we are not at “full employment” is because we have invested in capital which cannot be converted into things people actually want to buy. Returning to full employment is meaningless if we are not producing things people want – think of the giant paperclips produced by Soviet manufacturers in order to meet an arbitrary weight quota. These workers were employed, but their productivity was useless.

This is what the stimulus is doing for us. It’s postponing the problem – the problem that people have invested in worthless things – and propping up their value as if a worthless investment is just as good as a good investment. There is no such thing as homogenous aggregate demand: there is demand for cars, and there is demand for computers, but these are totally separate things. But after all, GDP is a number which doesn’t care what is produced. It doesn’t matter to the employment rate how the workers are employed. Keynesian economic metrics obscure the health of the economy just as its terms obscure the nature of our problem.

The Stimulus bill essentially implements a command economy by open market operations. Our government decides what to spend money on, and so prices shift accordingly depending on what they spend it on. The bigger the stimulus, the more we start to see the same economic problems of command economies arise in our own backyard. $7 87 billion can effect a lot of shifting – distortions which will ultimately come back to bite us with a deeper recession until we let the market adjust and get rid of these bad investments.

“Every time the citizens have voted on marriage, they have always sided with natural marriage,” said Mathew Staver, founder of Liberty Counsel, a Florida-based Christian legal group.
Gay leaders blame TV ads, Obama for loss in Maine

So Christians fight for what’s “natural” to be codified into our legal system?

Let us for the sake of argument grant that homosexuality is unnatural in some meaningful way. Guess what else is unnatural? Monogamy. Certainly the proportion of animals in the animal kingdom practicing monogamy is lower than that which practices homosexuality: Neither is unheard of, but both are comparatively rare. And if one can make an appeal to naturalness without reference to animals, then what constitutes naturality? Humanity stripped of its culture? No doubt homosexuality would be uncommon, but monogamy would no doubt be as well: the scenario changes nothing.

Arguments from naturalness must necessarily take homosexuality and monogamy as a package deal. Yet who among the social conservatives would advocate a repeal on polygamy bans on the basis of naturalness? Indeed, polygamy is usually further down the slippery slope than homosexuality in their conception, right before toaster marriage.

The error in reasoning that leads Christians to advocate a position which necessitates polygamy is readily apparent to anyone even marginally familiar with Christian doctrine, which apparently does not include the Liberty Counsel quoted above. Quite simply, “Natural” does not equal “Good”. “Natural” is almost always used negatively in the Bible. Throughout Romans 8, the natural man is contrasted with the spiritual man, and the natural man isn’t the good one. Indeed, sanctification at all – the necessary fruit of salvation – is completely unnatural, that is, against our nature. It is the result of an outside force, God, acting upon us, overcoming our natural tendencies – tendencies which would be to our ultimate destruction.

The Natural Marriage argument is nothing but a red herring, and coming from a legal group which calls itself Christian is at the same time a bastardization of Christian doctrine and a mockery of the American political process. It presumes a gospel which saves us to naturalness rather than godliness, and subverts the separation of church and state which exists for exactly this reason: that moral legislation (as distinct from just laws) is ineffective at best and counterproductive at worst.

The following is loosely transcribed from a speech I gave at George Mason University

In the late 1980s and early 1990s, the Soviet Union was in trouble. It had been on a protracted economic slide for many years, and showed no sign of lifting. Mikhael Gorbachev, leader at the time, fancied himself a reformer, and went on a spree of deregulation and privatization. But coming from such a regulated environment, the sweeps of deregulation were not – and could not be – total. People were free to do things they were not before, but the perverse incentives still existed. The house of regulatory cards collapsed: capital fled the country in a firesale, and with it went all potential for the future of the Soviet Union.

Now we’ll come back to that story later, and talk about Net Neutrality. Net Neutrality is an unpopular issue among Libertarians, most of whom are against all regulation at all times. Though it would indeed be ideal to have a completely deregulated market, this is not what we have, and we must be careful how we get there.

Let me start off with a brief explanation of what net neutrality is. It is in no respects a price cap. It is what we have now and have always had, though it has yet to be codified into law. Imagine, if you will, a line with you on one end, and Google searches, Youtube videos, and Rush Limbaugh podcasts on the other. Between us on my end is my service provider AT&T, and on their end, their respective servers, each of whom we pay respectively for access to each other. The key stipulation of net neutrality is that AT&T must treat all traffic I want the same. Whether I want to listen to Rush Limbaugh podcasts or send my friends Rick Astley videos, AT&T may not filter or give preferential treatment to data coming from one server over another.

Without net neutrality however, AT&T suddenly gets the right to charge me for access and to charge Google for getting their data to me. Content providers and websites get double charged. What this means is the death of free on the internet. Those increased charges aren’t going to be absorbed by Google; they’re going to be passed to the consumer. No more free Gmail, Youtube, Twitter, Facebook; and what of small blogs like this one? The single most important reason the internet has taken off so quickly as a tool of commerce and communication has been the low barriers to entry. If we take that away, we essentially kill the internet. Without the ability to pay double, we’ll be relegated to the lowest tier of access. People will get slow, if any, access to the material of all but the well-endowed, and that’s a best-case scenario. Countries like Iran and China use a nonneutral internet to outright filter political speech.

Now that Net Neutrality has been established as an unequivocally good thing from a consequentialist standpoint I ask further, what right does a service provider have to decide what constitutes a good or bad use of the bandwidth I’m paying for? I believe in consumer sovereignty in the marketplace. Consumer sovereignty is exercised through market competition as consumers flock to those who best meet their demands. Unfortunately the government has given regional monopolies to telecoms all over the United States – Verizon in the Northeast, AT&T and the former Baby Bells in a lot of other places, for example – stifling the potential exercise of consumer sovereignty.

This is where we get back to the Soviet Union. Total deregulation would be a good thing, but fiddling around at the margins is not necessarily so: it can even be disastrous. Am I saying that net neutrality legislation is ideal, or even good? Not in the least. What I am saying is that it is ultimately harmful to our infrastructure and to consumers if we allow a nonneutral internet before intra-regional competition can be firmly established nationwide. Deregulation is good, but in states of transition, we must take care to deconstruct our house of cards in such a manner that it does not first collapse upon us.

 

Pat Robertson, January 2008:

“he said oil would reach $150 a barrel – the price hit $100 on Wednesday – with the dollar continuing to lose value in 2008.”

Reality, October 2008:

“Crude has now fallen about 40% since surging to an all-time record $147.27 a barrel on July 11.”

So close, Pat! Despite the fact that your “prophecies” are for the most part relatively safe bets that any pundit/meteorologist could predict, they have once again failed to materialize. And that was back in October: Oil prices per barrel are less than a third of their high now, not to mention the dollar is doing great compared to both the battered Euro and the beleaguered Yen now.

Even more ironic is that it was his correct (if fairly safe; you could smell the bad economic news from a mile away) prophecy of a stock market crash that caused his oil prophecy to fail to materialize. Maybe he never got around to taking Economics at Washington and Lee. Either that or we were supposed to be in for Stagflation II: The Revenge of the Oil Shocks.

Of course Pat’s prophetic track record isn’t exactly the most illustrious, even putting this aside: no nuclear attack in 2007 (one of the more frighteningly specific ones), no hurricaines ravishing the coast in 2006 (on the opposite end of the safe spectrum, but nevertheless still wrong). But when the Lord takes to mocking your predictions like this, it’s probably a good sign that God is not telling you this stuff, Pat.

Surely by now every American is aware of the collapsed credit market and the imploding American auto industry. So what are the automakers telling us to quell our fears?
(WARNING: The sample of commercials is non-representative and based on two nights of watching an hour of TV.)

Honda was subtly and soothingly reassuring, with a hypnotically calm voice:
“Rest assured that now, as always, you can still get low APR financing.*”
*for well qualified buyers

One desperate-sounding Ford dealer accosts viewers with the fact that it has learned nothing from the credit crisis:
“Helloo-oo! Looking for a lease? Finance with Ford and everyone’s approved!“

One Mitsubishi dealer set in with an entire economic treatise:
“Think you can’t get credit? Well I want you to know that’s just not true! Yes our sales are down but that’s due to low consumer confidence and not lack of credit! With demand low and supply high now is the time to buy your new Mitsubishi! We have good relations with over 50 lending institutions who are ready and willing to extend you credit!”
Translation: He does not forgive [lack of credit for you], he does not forget [his econ 101 class]. His group has over 9000 lending institutions… AND THEY’RE ALL RAPING CONSUMERS

That annoying Suzuki dealer is still putting out commercials. My gosh I hope he goes bankrupt. Really, who buys Suzukis anyway?

One Nissan dealer rehashed Honda’s message in peppier form:
“Think you can’t get approved? Think again! Come on down to…”

Toyota’s annual Toyotathon commercials seem to exude an air of “Crisis? What crisis? Oh really? I hadn’t noticed”. They’re probably going to be first in line for the dance on the laurels of the Big 3 anyway.

And finally, I have yet to see any commercials from GM or Chrysler, or any of their affiliated brands. Probably because they have no advertising budgets anymore.