The New York Times – whose motto “All the News That’s Fit to Print” has morphed into “All the News That Fits” – is willing from time to time to let a little light shine on taboo subjects, to let something be printed that doesn’t fit their establishment mold, something that conflicts with their primary ideology. It was refreshing to read.
The title is hardly a catcher: “Stabilization Won’t Save Us.” What? How much better would be what Nassim Taleb wrote in his opening paragraph: “The cliff is really just a red herring.”
First, a word about Taleb. He is the author of the best-selling book, “The Black Swan“, about the impact of random events on society, and how they are more common than people think. He’s also an advisor to the anti-freedom, pro-world-government International Monetary Fund. But, interestingly, he doesn’t appear to be a Keynesian. He is more a realist and, more remarkably still, he is willing to stake his reputation on being outside the mainstream.
He says the fiscal cliff discussion is just so much hot air and persiflage – one of my favorite words that means treating a serious subject with frivolity – in order to hide the real import from being considered:
The fiscal cliff is not really a “cliff”; the entire country won’t fall into the ocean if we hit it. Some automatic tax cuts will expire; the government will be forced to cut some expenditures. The cliff is really just a red herring.
Nor will any “solution” save us from the consequences (being hidden) of decades of deliberate overspending:
Likewise, any last-minute deal to avoid the spending cuts and tax increases scheduled to go into effect on Jan. 1 isn’t likely to save us from economic turmoil. It would merely let us continue the policy mistakes we’ve been making for years, allowing us only to temporarily stabilize the economy rather than address its deep, systemic failures.
I told you it was refreshing!
The “solutions” proposed by Keynesians – whose ideology has gotten us into the mess we’re in – will only make the problem worse:
Stabilization, of course, has long been the economic playbook of the United States government; it has kept interest rates low, shored up banks, purchased bad debts and printed money. But the effect is akin to treating metastatic cancer with painkillers.
He has much more to say, of course, but just this brief “lifting of the corner of the rug” under which our problems have been swept was refreshing.