And why was Joseph able to pull off this miracle? Because Megan McArdle had not yet been born.
When people like Paul Krugman say that almost $900 billion in stimulus didn't work because it wasn't big enough, you have to wonder if an adequate Keynesian stimulus is even possible. Could any government anywhere borrow 15% of GDP or more to spend on temporary measures with the blessing of their citizens? For that matter, would the markets lend the money without ratcheting up interest rates? Can an extra 15% of GDP be spent without showing sharply diminishing returns--meaning that you'd need even more spending to generate the effects you want?
Today Alex Tabarrok looks at the history and concludes that even if Keynesian economics works in theory, Keynesian politics fails in practice--at least in a Democracy....
Can you just imagine McArdle in Ancient Egypt?
Joseph: And now let Pharaoh look for discerning and wise commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance, to store up the grain to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.
Pharaoh: Not bad, Joseph, not bad. Let's---
A tiny cough is heard.
Megan McArdle: *Ahem*
Pharaoh: My advisor spoke?
McArdle: Far be it from me to disparage the advice of my esteemed colleague, but could any government anywhere borrow 15% of GDP or more to spend on temporary measures with the blessing of their citizens?
Joseph: Great Pharaoh, if we do not save the grain many peasants will starve 7 years hence.
McArdle: The peasants won't be happy if they get less grain right now, will they? If you take away some of their grain now they'll stop working altogether! I have a papyrus right here that proves that 78% of peasants would rather have real grain now than hypothetical grain in the future.
Joseph: I would like to see that papyrus.
McArdle: It's behind a paywall and you wouldn't understand it anyway, as you have not gone to the University of the North Kingdom and therefore are not a real advisor.
Pharaoh: Advisor McArdle, do you not think that saving grain is a good idea? It will prevent starvation. What part of that plan is in error?
McArdle: Well, while the plan seems to work in theory it will never work in practice because there is no will to save the grain.
Joseph: Pharaoh need only make the decree and the grain will be saved. Nothing keeps us from enacting this plan but the will to do so.
McArdle: Exactly! There is no will to save the grain!
Joseph: But--if the Pharaoh declared the grain to be saved, it will be saved. I understand not this argument from my colleague.
McArdle: Enacting Joseph's solution will prevent us from finding other solutions to this intractable problem.
Joseph: You answered me not.
McArdle: It is theft to take people's grain. They worked hard for that grain and now you're going to take it away from them?
Joseph: The peasants will understand and in time will rejoice at the wisdom and foresight of their Pharaoh when he is able to feed his people in their time of need.
McArdle: Oh, well, if all you care about is being elected Most Popular Pharaoh, then by all means, start a food riot and see how much grain you'll save then.
Pharaoh: My head doth hurt.
" Could any government anywhere borrow 15% of GDP or more to spend on temporary measures with the blessing of their citizens?"
ReplyDeleteUh, yeah, actually. China did just that. And their big problem right now is...inflation.
Ken:
ReplyDeleteInflation from what? You mean because there was a drought and wheat prices shot up? Or because Bernanke is pushing inflation through QEII? What you think is causing inflation isn't.
For another take on this story, check Fred Clark ("Slacktivist"), who talks about the really dark side of the Joseph tale.
ReplyDeleteI don't think the analogy quite fits, since saving grain now for use later isn't quite like borrowing now.
ReplyDeleteA closer match to the current situation might have been that during the fat years, pharoah's supply-side advisors noticed grain piling up in the granaries and concluded that the people were over-taxed, and that if only pharoah would stop stealing their grain they would be spurred to grow even more grain, thus ensuring that the silos were empty when the lean years came.
Ken, your blogger avatar is someone falling from the wtc? You couldn't find a picture of a stillborn baby or an old lady getting hit by a train?
ReplyDeleteYou are aware that that's a real person with a real family and real friends, aren't you?
Note that China can neutralize any effect of QEII by revaluing its currency whenever it wishes. The US isn't the only country whose leaders have feet of clay.
ReplyDeleteNicely played, Susan. Of all your vignettes, this was my favorite. You captured the essence of McArdle beautifully.
ReplyDeleteImaginary ArgleBargle's argument makes more sense that the real one ever could.
ReplyDeleteMegan and most Repigs seem to believe at ALL taxes and all Government are badbadbadbad!
ReplyDeleteThey believe our country should be run without taxes or Government: just like a corporation!
Their dream is coming to pass, too. And we see the results: the country's business is profit for huge corporations. Nothing else matters, American's health, safety, education, homes, NOTHING else matters to the corporations and the idiot goons they hire to spout their propaganda.
Arguments Megan makes can't be made intelligently, because they're stupid and insane. Only a moron such as She could actually seem to believe the BullPlop that she writes.
I'm sorry to say that I agree with "anonymous"--I never notcied that Ken's avatar was a picture of a person falling to their death from the WTC but its in horribly poor taste: exploitative, and grotesque. As grotseque as putting up the image of a famine victim, torture victim, or dead person from Katrina, Iraqi victim of our war. Its in bad taste and exploitative regardless of the status of the people who view it. Nothing to do with Michelle Malkin who would--no doubt--approve it if it came with the headline "Muslims approved this" or "Another liberal death" or something equally grotesque.
ReplyDeleteaimai
The real(ish) Bible is full of McArdles. Scribes, pharisees, Pharohs wizards.
ReplyDeleteIn the Old Testament they tend to get smote, which cuts down on the realism.
I always like it when McArdle chooses to challenge Krugman; sorry, Megan, but that's just not a fair fight.
ReplyDeleteAnd yes, Ken's avatar is in bad taste. I've never been able to look at those photos and not be shocked and horrified; what's the message here, Ken?
And holy crap, Skippy, does it matter that nobody knows who the falling person in Ken's photo is? It's a human being who, two hours ago was on the phone or having breakfast or on the subway, living his normal life and in two seconds is going to be mush--with three seconds gone by in mid-air at a hundred miles an hour to think about it.
ReplyDeleteDisgusting.
I understand about the photo, but I grew up with my personal tragedy being a public political issue and it is not as big a deal to me as it is to others.
ReplyDeleteI always used to wonder what Vietnamese children thought about the war photos I saw in books, magazines, and on tv. And it made me very angry to see us invade the Gulf twice without thinking about the orphans we were creating, here and there. But the whole thing was so big--war, politics, Johnson, Nixon, protestors, war hawks--that I learned to separate the two emotionally.
I live near and work in NYC. I lost people in the bombing. I had coworkers one of those planes. My neighbor came home covered in dust--and everyone was happy that he came home at all, having previously lived through the 1993 bombing and the Reagan-era attack in Lebanon that killed over 200 American soldiers.
ReplyDeleteI make no apologies for the avatar; people should be reminded that there was a human cost at the root of all the insanity that followed.
Contemporary historians are telling us that no one ever jumped when the stock market crashed. I'm not, given the choice, going to let that happen to the WTC bombing.
Never forget, and never stop trying to make the world a place where people don't have to make such choices again.
In short, What Susan Said.
Back to topic, China's stimulus package was 17% of their GDP. And while we hear a lot about unrest in the Middle East and crony capitalism in Russia, China has built up (with whatever respect is due Phil Perspective's claims) endogenous inflation by increasing worker pay over the past year.
Yeah that ancient example of a government program to prepare for "lean times" really worked well. Almost no one starved thanks to Nanny Pharaoh's program; of course they lost all private property and became his slaves but they did get fed. Be paranoid, it helps.
ReplyDeleteI imagine ArgleBargle arguing that Rich People shouldn't have to contribute to the saved grain: after all They can buy grain elsewhere if there is a drought in Egypt! In fact Rich People can buy grain elsewhere and sell it at very high prices to the poor Egyptians -FREE MARKET! HOORAY! so therefore, saving grain is actually HURTING Rich people, who are the only ones who matter.
ReplyDelete