Evidence is only of use to the mind that is prepared for it.
Every time I see the government of Japan (or some other government) spending yet more money, in spite of the failure of all their previous government spending orgies, I am reminded of this.
Because, of course, to them there is no such thing as evidence that expanding government spending is not a “good thing”, just as there is no such thing as evidence that trying to finance lending (“investment”) via credit/money expansion, rather than solely by real savings, is not a “good thing”.
On the contrary, any economic decline (perhaps even mass starvation) is interpreted as evidence that there should both be more government spending (an “expansionary fiscal policy”) and more credit/money expansion (an “expansionary monetary policy”).
This is due to the framework of ideas in the heads of the politicians, administrators, mainstream academics and media people – and, yes, many businessmen… What Perry would call the “metacontext”.
Yet in the private sector, this sort of behaviour is called this a ‘pyramid scheme‘ and people get thrown in jail for it.
It’s like global warming…if the world gets warmer, it is global warming; and if the world gets colder, it is global warming.
It is the religion of the Left, and the faith of their followers.
If the world is in trouble, it is because government hasn’t done enough; if the world is doing fine, it is because government is doing all the right things and needs to do more. If the private sector does it, it is a Ponzi scheme or a pyramid scheme; if the government does it, it is responsible and responsive action.
You don’t have to think when your faith is left of center. All you need to do is get comfortable and consume your young.
What I find interesting is that leftists invariably ascribe the most despicable of motives to those in power whether in politics or in business. According to the leftist narrative, the political class are capitalist tools, highly efficient master manipulators who frequently pull the wool over our eyes to serve their real paymasters in big business, and who consciously countenance the most appalling evils in order to further their nefarious ends.
The average leftist has no more respect for the average politician than the average Samizdata poster does. What I find odd is that with leftists, a recognition of the great harm caused by politicians never becomes a criticism of political power per se. The left are perpetually angry with government of the day. The believe that politicians are evil greedy lying bastards. However they simultaneously think its a good idea for those evil greedy lying bastards to have more power and do more stuff.
There is a very unusual outfall in all of this Madoff operation.
It is now being asserted that those contributors to the funds at earlier dates, who withdrew their contributions (and presumably some resultant “yields”) may be required to disgorge some part of their withdrawals on some theory of receiving stolen money (collected from subsequent contributors).
Some legalists have stated there may be a six-year lookback for “recoveries.” Probably a nightmare of forensic accounting – if indeed there are sufficient records of whatever reliability.
Under the doctrine of Jarndyce v. Jarndyce, the first step will be to recover funds, slower and secondary will be the determinations of who is entitled to recompense (net of Trustee charges, etc.). Perhaps we can expect 2020 for hindsight?
This reminds me of Billie Sol Estes, during my work in a past Eon in Texas, and a particular interview with a “victim” who said: ” Ah don’t know of a single totally honest man who’s lost a penny with Billie Sol.”
Gentlemen,
You needn’t post this actually. I merely wished to say that it is heartening to have stumbled across this network, a seeming oasis of intellectual courage and clarity of thought. Such a thing is so rare that I wished to express my …. gratitude.
— Diana (Orlando, Florida)
Jerome, I think that the religion of the left states that THEIR politicians have good motives, and that the end justifies the means when they do something untoward or marginally legal (or completely unconstitutional).
The real venom is saved for anyone who isn’t in their camp. THEY are evil and THEIR motives are foul. Even if the outcome is the same.
The state, in the hands of the right people, is alway a force for good in the minds of the left. Their eternal dream is to get the right people in power and then all will be utopia.
It is the vision of the anointed.
I keep coming back to the question – where did the money go? If Madoff spent a billion dollars for some stock, the sellers got that money. So the money still exists, even though the stock went to zero. Are the sellers of stock going to be forced to disgorge money obtained fraudulently by Madoff, even though they received it fair and square? Or did Madoff ever actually buy any securities?
As to where it all ends when the government goes belly-up, consult military history. War is, indeed, the health of the state. And war can be the salvation of the state’s many Ponzi schemes. But not just a little war like Iraq. One big enough to wipe the slate clean.
There have been two recent news items that essentially show the non-sustainability of Ponzi schemes – Madoff, for sure; also the US auto industry, which has finally run into the Ponzi-like impossiblity of living up to ever-expanding health care & retirement obligations.
Ponzi schemes are non-sustainable. And as we all know, governments run the biggest Ponzi schemes of all. Which means that the current near-fascist model of ever-expanding government is non-sustainable and will certainly fail in the long run.
The aftermath may be a bitch, but at least Samizdatists can take grim satisfaction that the deck will certainly get reshuffled. Merry Christmas!
The “entitlement programs” are indeed a Ponzi scheme – “Social Security” is one of the most classical kind, and was even before L.B.J. started to “raid the trust fund” as the “trust fund” was just made up of government securities (government I.O.U.s) anyway.
We now know that there is a direct link between the Auto welfare scheme and Madoff – as the head of GMAC (the bit of General Motors today declared a bank so it can have bailout money) is one of Madoff’s boys – and is being sued by the investors in his hedgefund (for just passing on the investment money to Madoff – rather than doing what he said he was doing with the money).
However, even if the various corporate managers with their hands out for a bailout were totally “honest” their whole enterprise (the political one of demanding ever more money) would still be criminal – for those who do not define “law and crime” as simply whatever the government likes or dislikes at any given moment.
The left see this as “Capitialism in a oxygen tent” (or “late capitalism”) and regard the government as a the executive committee of the capitalists.
And they would point to exactly the same “empirical evidence” that we do, and say it proved their case not ours.
This is the point about such evidence – people interpret in the light (or darkness) of their own basic theories.
For example, today B.B.C. Radio Four (the 0900 news) reported that Japan had the biggest drop in industrial output for more than half a century.
I thought (for a second or so) “how are they going to fit that with deficit government spending being a good thing” – but then (on the same newscast) came a businessman saying that this proved that all the countries of the world should work together under President Obama to “increase the fiscal stimulus” i.e. that governments should go for even more deficit spending.
He had seen the same facts as me – and drawn the opposite conclusion. And, with the basic ideas he had been taught at school and university, it was natural that he should.
I do not believe that reason is helpless – but we have a hard job to do. We can not rely on “the facts to do our job for us”.
As my above comment hints, the modern left is a mixture of ideas from very different thinkers.
The idea of government spending (an “expansionary fiscal policy”) and an increasing the money supply (an “expansionary money supply”) being a good thing is from John Keynes – and, in part, from such people as John Law and John Hales before him.
The rest of the leftist ideas pointed to in my above comment are from Karl Marx – a thinker whose ideas are not compatible with the different (although equally false) ideas of John Law, John Keynes and the rest of thinkers of so called “modern economics”,
Of course the ideas being logically incompatible does not stop people mixing them – knowingly or unknowingly.