A colleague of mine used to patronize the people who assembled machine tools in a large machine tool manufacturing facility. The colleague was an electronic technician who was responsible for debugging and testing the machine tool electrical controls. Frequently, the assemblers asked him how the control “knew” where to move, say, the table or the slide of the machine tool. An adequate explanation would have taken more time than it was worth. So, the technician simply told them that “it was all magic.” They never accepted that explanation and they always wanted him to explain things further. “Well,” he say, “it’s like putting your tooth under the pillow at night and finding a quarter there instead in the morning. It’s a Tooth Fairy sort of thing. And it’s all magic.”
Much of what passes for economics today is that Tooth Fairy sort of thing. Your car won’t start? Try pushing it off a fifty-foot cliff unto the jagged rocks below. It didn’t start? Okay, try pushing it off the 100-foot cliff nearby. What? It still didn’t start? We need a 200-foot cliff, folks. The “stimulus package” wasn’t big enough.
I’m sure that there is a Miss Romer somewhere dug into her stuffy Keynesian burrow who is wondering why the United States’ stimulus plan didn’t work. Somewhere, a Mister Summers is scratching his head over the same issue. “If only we had spent more!”
Now, a fool comes out of Texas with an absurd reprise of France’s 35-hour workweek (1998-2008). Remember that? Let’s reduce the workweek hours and spread the jobs around. Today this Texan fool says let all of those older folks retire who want to retire, and let the younger unemployed take their jobs. It’s a win-win for everybody. Well, except if you work the mathematics: The person now working pays a portion of his salary into Social Security and Medicare “trust funds.” That person retires and begins to draw down those “trust funds.” The younger person begins his new job and starts paying the same fees to the “trust funds” as the older person did. No matter who works the same fund amount is contributed. But in this case, an additional person is drawing funds out of the “trust funds.” Can’t bankrupt the Social Security and Medicare “trust funds” fast enough? Try getting more people to draw out of the system.
Tooth Fairy economics. Put your tooth under the pillow and tomorrow there will be a coin there. It’s all magic.
Much of what passes for economics today is that Tooth Fairy sort of thing. Your car won’t start? Try pushing it off a fifty-foot cliff unto the jagged rocks below. It didn’t start? Okay, try pushing it off the 100-foot cliff nearby. What? It still didn’t start? We need a 200-foot cliff, folks. The “stimulus package” wasn’t big enough.
I’m sure that there is a Miss Romer somewhere dug into her stuffy Keynesian burrow who is wondering why the United States’ stimulus plan didn’t work. Somewhere, a Mister Summers is scratching his head over the same issue. “If only we had spent more!”
Now, a fool comes out of Texas with an absurd reprise of France’s 35-hour workweek (1998-2008). Remember that? Let’s reduce the workweek hours and spread the jobs around. Today this Texan fool says let all of those older folks retire who want to retire, and let the younger unemployed take their jobs. It’s a win-win for everybody. Well, except if you work the mathematics: The person now working pays a portion of his salary into Social Security and Medicare “trust funds.” That person retires and begins to draw down those “trust funds.” The younger person begins his new job and starts paying the same fees to the “trust funds” as the older person did. No matter who works the same fund amount is contributed. But in this case, an additional person is drawing funds out of the “trust funds.” Can’t bankrupt the Social Security and Medicare “trust funds” fast enough? Try getting more people to draw out of the system.
Tooth Fairy economics. Put your tooth under the pillow and tomorrow there will be a coin there. It’s all magic.
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