This was posted first at Powerline and then at Instapundit.
APRIL 28, 2020
I, MECHANICAL PENCIL: Why a socialist economy can never work.
This followed the posting by Steve Hayward about how difficult things might be to re-start after the compulsory shutdown which is disrupting so many markets in so many novel ways: “WHAT HAPPENS IF WE BREAK THE PENCIL?”. This is the point he was making.
I don’t think our political class in Washington or the state capitols have the slightest idea of how they have disrupted the workings of our economy beyond the mere measure of the (huge) number of people filing for unemployment, which they think can be fixed simply by printing more money and sending out checks….
Contemplate the effects the shutdown is having on the millions of daily decisions made by producers and consumers alike. Maybe our political class just needs to just get the hell out of the way.
On a cost-benefit basis, the entire shutdown process has already turned out to be economic monstrosity: such a fantastically high cost – so few benefits (have there actually been any?). But if these same people start using the restarting of our economies as an excuse to add a few more of their favourite “stimulus”-type schemes, the costs will be magnified many times over.
The point of “I, Mechanical Pencil”, as well as its predecessor, “I, Pencil”, was to emphasise governments know nothing about how to direct economic activity or have the slightest idea how to choose projects that raise living standards and hasten economic growth. Seriously, would you want Scott Morrison to start funding his favourite projects? Or any of the state premiers any of theirs? More streetcars, say, or rail projects, perhaps? How bout pumping water up hill?
What is most notable to me about “I, Mechanical Pencil” is how difficult the point it makes is to understand, and how easy it is to ignore since most people never get the point. I will just say again, that if anyone actually believes an economy is driven forward by aggregate demand, they are as ignorant as the day is long about what it takes to make an economy grow.