Is God an economist?

Charles Munger has a column in this morning’s Washington Post. I’d use an insulting adjective to preface “column” if I could think of one awful enough to accurately depict his nonsense.

Our situation is dire. Moderate booms and busts are inevitable in free-market capitalism. But a boom-bust cycle as gross as the one that caused our present misery is dangerous, and recurrences should be prevented. The country is understandably depressed — mired in issues involving fiscal stimulus, which is needed, and improvements in bank strength. A key question: Should we opt for even more pain now to gain a better future? For instance, should we create new controls to stamp out much sin and folly and thus dampen future booms? The answer is yes.

Sin. That’s how you know you need to go no further. But we must, just to know where it will lead because central planners never understand that “imposing” is not a synonym for “restoring”.

Sensible reform cannot avoid causing significant pain, which is worth enduring to gain extra safety and more exemplary conduct. And only when there is strong public revulsion, such as exists today, can legislators minimize the influence of powerful special interests enough to bring about needed revisions in law.

Speaking of synonyms, “strong public revulsion” is a synonym for “populism”. Through the first two paragraphs, it’s clear that Munger has no interest in the economics of the current recession. Its narrative offends him so we must all act with the force of the government, consequences be damned.

Many contributors to our over-the-top boom, which led to the gross bust, are known. They include insufficient controls over morality and prudence in banks and investment banks; …

Insufficient controls over morality. Does Munger explain this? Of course not, because strong public revulsion covers it. We’re all outraged, so we must Do Something. His something is to increase taxes because it is our duty to “demand at least some increase in conventional taxes or the imposition of some new consumption taxes” to punish ourselves for our immorality.

The rest of the column is an incoherent, crusading mess.

One thought on “Is God an economist?”

  1. Moderate booms and busts are inevitable in free-market capitalism.
    They are? How can we know, since there hasn’t been free-market capitalism in the U.S. for over 150 years?

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