The Whole Political Class can be Wrong

Since the Democrats are going to hold up FDR like a shiny icon for the masses to revere, those of us in opposition to increasing state control of our lives should shine the light of truth on the original new dealer. The mass suffering of the great depression is primarily the result of bad political decisions. Arnold Kling writing at TCS Daily turns on the spotlight.

What Roosevelt Didn't Know: Still, most of the ignorance that plagued policymakers during the 1930's was conceptual. They did not understand the difference between lost resources and under-utilized resources. They did not understand the relationship between financial markets and markets for goods and services. And they did not understand the issue of deflation.

It seems to me that economists could have seen that the prosperity of the 1920's was not false. They could have portrayed a return to that level of production as a reasonable goal, not an impossible dream. They could have distinguished between the ups and downs of stock prices in the asset market and the productive capacity in the goods market.

A great many in the political leadership of the 1930's assume the prosperity of the preceding years is unsustainable. A prosperity so widespread that every individual has opportunities to achieve a better life surely, they thought, must be fated to end. When the troubles hit, instead of acting to reestablish the economy, the political class develops compassionate ways to help mitigate the transition of the masses back to the normalcy of the hard life.

The unsustainable wealth of modern life is again a conviction with broad following in the governments of the western democracies. If it was an ignorance of economics forcing the great depression upon the population, it will be the ignorance of science that will erode away the good life our progressive liberty creates.

Power Shifts: In short: if you are thinking global warming is both man-made and a disaster, start investing in stomach remedies, because you'll have a lot of indigestion and not much else in the coming decades. What dots did I connect to arrive at that statement? Simply this: every drop of oil in the world is going to get burned. If not by us, then by someone else. That's reality, get used to it.

Get ready to start hearing names like Gazprom (Russia), Pemex (Mexico), Petrobras (Brazil), Petronas (Kuala Lumpur), CNPC/PetroChina/CNOOC (China), PDVSA (Venezuela), Saudi Aramco, and yes, Iran's NIOC. You'll notice that a good many of these companies are in places that aren't friendly to freedom and private enterprise.

There is no reason to fear the use of energy and every reason to fear any politician claiming we need to scale back our lives. Even if the second law of thermodynamics suddenly ceases to work, enabling every scary bad thing that can be computer animated to come to pass in the real world, any self induced suffering won’t matter because the oil economy is beyond our control.