The Ongoing Keynesian Freakout Will Cost Much More Than Money
Amid all the negativity of late, one bit of good news has come via the internet. In particular, Americans haven’t suffered slower internet speeds despite a reported uptick in home computer use related to work, along with the frenzied streaming of movies and documentaries on portals like Netflix.
About all this, Farhad Manjoo ought to apologize to his readers. Back in 2017 he wrote a piece for the New York Times titled “Without Neutrality, Say So Long to the Internet.” Woops!
Funny about it is that readers can bet Manjoo is scribbling yet another misguided column from home as you’re reading this. He’ll file it on his WiFi enabled computer with ease, before engaging in all manner of internet-based activity despite his downcast prediction from just a few years ago.
Oh well, enough about Manjoo. The remarkable internet speeds that Americans are enjoying speaks to a crucial truth about what powers the productivity without which there is no economic growth. The latter is a consequence of investment. Thanks to copious investment in broadband by the profit-motivated, Americans are more and more productive. Better yet, they can be quite a bit more productive from anywhere thanks to ceaseless investment in technology that makes it possible for us to be connected at all times.
Thinking about all this through the prism of a tragic economic lockdown that is harming everyone, but that is hurting those with the least the most, one reason tone deaf and economically illiterate politicians arguably feel comfortable shutting down the economy is a consequence of the ubiquity of high-speed internet. Where politicians live, and with whom they rub elbows, work is increasingly what we do anytime, from anywhere thanks to internet speeds that rise all the time.
Unfortunately and tragically, the political class forgot that not everyone’s like them such that they can “work remotely” for several weeks, or months. For the less fortunate, work is a destination. It frequently involves meeting the needs of people in person. Which means a high number of workers are experiencing layoffs, business closures and financial ruin as a consequence of the brutally cruel non sequitur foisted on them by politicians: a virus threatens, so shut down the very economic engine that has been crushing virus and disease for decades. It makes one sick to think about. Unfortunately, the same politicians who’ve brought on economic devastation and ruin for all too many are in the process of adding to their egregious error.
To understand why, consider the $2 trillion “stimulus” bill already passed. That it won’t stimulate is a statement of the obvious. The growth already occurred. That’s how Congress was able to raise the $2 trillion.
To clarify the previous assertion, consider a poor country like Peru. It’s not as though its politicians aren’t hopelessly Keynesian like the ones in the U.S. Rest assured they are. They spend less simply because Peruvians are exponentially less productive than Americans are. Politicians in Peru have arrogated to themselves a percentage of Peruvian private sector production that’s likely similar in percentage terms to what U.S. politicians take from us. The government spending difference is a result of Peruvian production that is a tiny fraction of the size of U.S. production. To be clear, governments can only spend insofar as the private sector creates wealth that they can tax, then redistribute.
Repeat again and again: governments cannot stimulate with spending. The growth already occurred, hence their ability to wastefully spend.
All of this must be considered with the high-speed internet example that began this piece very much in mind. We have internet speeds that continue to soar, and because they do, work for a growing number has yet again become a productive endeavor from anywhere. In other words, 4G internet speeds on phones and home internet speeds much greater led to abundant job creation that was impossible before those speeds (think Uber, for example), along with soaring work portability.
Imagine then, what 5G will bring to individual productivity, along with jobs previously unimaginable. And if 5G is amazing, in time even more investment will render the 5G that people talk about now in awestruck fashion as wildly pedestrian and primitive. Investment relentlessly pushes individual productivity upward, all the while transforming how and where we produce.
Please now consider the happy truth about investment in terms of shrinking job prospects for everyone, but most cruelly shrinking prospects for those with the least. It’s apparent politicians are about to bring even greater harm to those already devastated by their actions.
Having wrecked their economic situations via lockdown, politicians who bring new meaning to self-unaware arrogated to themselves even more of the wealth always and everywhere produced in the private sector with an eye on sending checks to individuals and businesses. Basically politicians put people out of work, and put businesses on the verge of bankruptcy, only to then throw money at those victimized as a though $1,200 would make up for jobs lost, and businesses destroyed.
This rates a lot of attention when it’s remembered that the $2 trillion redistributed from those most likely to invest to those least likely to invest is set to increase by many trillions. Translated, politicians put millions of Americans out of work, and now they’re in the process of extracting trillions more from the private economy that, if not redistributed, would exist as investment necessary to get Americans working again.
The money not spent by Congress would, among other things, fund future internet speeds and communications advances that would make the present seem dated by comparison. Crucial is that some of the advances authored by investment would put even more of us in the position to at least somewhat work around the errors of politicians who, when presented with a virus, chose to destroy the jobs of millions as a response.
Alas, future progress will be slower care of politicians who, having wrecked all too many lives, decided to wreck more through even more spending. If you’re not a libertarian after this crack-up, you should have your head examined.