Illusion Economics

One game plan for liberal politicians (and some conservatives) is to first convince you that you have it bad so they then can make the case that they can help.

There is a good example of this in my previous post. Graphs might lead you to believe one thing, but that’s blackboard economics. Look out the window and you will see a different story.

Thinking you have it good or bad is a matter of perspective. Poverty, itself, is a matter of perspective. Sure, if a politician compares the life of a poor person in the U.S. to a rich person, the poor person might feel slighted.

But, the observations from a student from India (via Instapundit) might help poor people in the U.S. find a better perspective:


Sometimes it’s hard to see the conveniences and standard of living the wealth of this country affords all people.

This reminds me of a news magazine show I saw long ago, when Brad Pitt was still courting Angelina Jolie. He said that on one of his visits to Africa he asked why they don’t have grocery stores and pharmacies on every street corner filled with remedies for basic ailments — ailments that kill people in poverty in other countries.

Capitalism is the answer. They don’t have much of it and we have more. Here’s why capitalism ensures we have ready access to the thousands of things that help improve our standard of living in ways that we are too spoiled to recognize.

Live in a country where the government or thieves (often one in the same) are going to take your stuff as soon as you have appeared to add value to it (like building a water well or fence to keep livestock) and you quickly learn that it isn’t worth expending the effort.

So, while the graphs Daniel Little uses and the speeches that politicians use may convince many that they are being slighted, in reality all of those people have a standard of living that is unsurpassed ever on this planet. Little’s charts don’t measure the value of having quick, easy and cheap access to basic rubbing alcohol that can easily prevent scrapes and scratches from becoming infected, life threatening injuries.

PS I also thought it was funny that the student from India thought we drank way too much coffee and thought it was crazy that we would spend so much on it, when we could brew it so easily and cheaply at home.

But, I think this goes back to his comment on the classless standard of living. We are generally so wealthy that we choose to hire others to make coffee for us.

Happy Birthday, USA!















For imposing Taxes on us without our Consent


“Energetic Government”

In the American Enterprise Institute’s Debate, How Much Government is Good Government?, David Brooks makes a case for an “energetic government” that “builds character.”

I believe the following passage from Brooks provides the key assumption for his energetic government stance:

…the reason that America got rich in the nineteenth century was because we were the most educated country on earth, and we could count on a certain level of social capital we no longer can.

I don’t believe that’s why America “got rich”.

To me, that’s like saying, I got rich by saving for retirement.  That’s not accurate.  You were able to save for retirement, and become rich, by creating enough value for others to generate an income for yourself.

Similarly, I believe the cause and effect flows the other way from how Brooks describes it.  America became the most educated country on earth, with a certain level of social capital [i.e. things like public education, social security, unemployment, etc.], because America “got rich”.

America got rich through bottoms-up innovations enabled by the most democratic, fair and socially mobile system the world has ever witnessed, capitalism.

If Brooks were to consider that he is wrong about how America got rich and wanted to learn other possible explanations, I’d recommend that he start with Matt Ridley’s book The Rational OptimistThis post and this one discuss some of Ridley’s, and my own, insights on the matter.

Of course, Matt and I could be wrong, but I have not found convincing evidence of that yet.  But, would love to hear some.








They go on:




