Calling John Galt

A pharmacist in Brewton, Alabama, prescribed his own cure for the recession. He gave his employees unexpected bonuses, paid out in two-dollar bills.

He challenged them to give to charity, and spend all of that money in local downtown businesses. Just as you’d expect, the money is circulating in a very visible and tangible way.

The instructive piece here comes from the comments. This one, from Zekie:

It’s called basic economics. It is exactly how Obama’s stimulus bill is supposed to work. And it’s exactly how Bush’s worked. However, there were no new jobs created to keep the $$ circulated.

First of all, there is a big difference between a stimulus where they money is injected from the outside (the $16,000 in savings the pharmacist invested in the project), and money that the Federal government must first acquire through taxation, borrowing, or printing.

Second, there is a bit of circular reasoning in effect. The stimulus is supposed to create (or save) 3.5-million jobs, but if the jobs don’t exist the money doesn’t circulate?

CDM2008 adds this piece of wisdom:

Wherever you live, spend locally. Eat at local restaurants, shop at local stores, patronize the businesses that are the foundation of your community. It’s a shame large news stations won’t pick up on something like this. Imagine if it happened in communities throughout the U.S. Good news for a change.

Sorry, but “Buy Local” only works if “Local” saves you money. Going out of your way to prop up local businesses is clearly your choice, but any effort to artificially reduce competition just results in higher costs and greater inefficiency. 

If “communities throughout the U.S.” did this very thing, we’d be in seriously dire straits. Trade creates wealth at a greater clip if those trades are of the greatest value to both parties. Such artificial caps reduce the overall wealth and welfare. Yes, it looks good for your community in the short term, but “if everyone else did it” there would be a tremendous flow of capital into the community that gets shut off in the bargain.

If Zekie and CDM2008 have their way, you’d better get used to those $2 bills, because they’ll be getting awful lonely and stale.

Thank you, Mark Cuban.

The Stimulus money being offered to the states is little more than a Cat’s Cradle: so many tangled strings it becomes a woven prison.

If there were no strings, states could simply accept the federal dollars, cut their own taxes the same amount, and enjoy the benefits of a stronger state economy.

However, states are now being lampooned for turning down “free money,” that comes with provisions that entail permanent and onerous conditions.

This Cat’s Cradle is so strangling that even the rats are staying away.

Simply put: the Stimulus doesn’t return the same bang for the buck as private investment, so why take money out of the hands of private investors?

Why is this still timely?

And why is Leslie still right?

“The American people earned that money, they have the right to decide how it should be destroyed.”

“Let the free market decide what is the most efficient way of destroying money.”

“Why are you pushing this Pro-Hole agenda? Is the money-hole lobby paying you?”

But we must do something, right?

No.

Stimulus. See if it’s right for you.

From Newsweek:

“Obama has allowed Congress to grow embroiled in nitpicking over efficiency when the central debate should be about whether the package is big enough. When you are dealing with a stimulus of this size, there are going to be wasteful expenditures and boondoggles. There’s no way anyone can spend $800 to $900 billion quickly without waste and boondoggles. It comes with the Keynesian territory. This is an emergency; the normal rules do not apply.”

Thanks for the clarification, Senator Palpatine. Can I fetch your robe and cowl from the cleaners?

From this NPR piece, Obama Gives Keynes His First Real-World Test:

“Prescribing Keynesianism to some politicians is like prescribing crack to a coke addict.”

(If they ran more of this during pledge drive week, there would be no need for taxpayer funding.)

Overheard on the news:

“President Obama’s top economic advisors say the economy will probably get worse before it improves, even with major government intervention.”

Should have read:

“President Obama’s top economic advisors say the economy will probably get worse before it improves, most likely because of major government intervention.”