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Idiotic! Right-winger P.J. O'Rourke Praises Capitalism in Wall Street Journal By Comparing It to a Pizza

Mr. O'Rourke is one slice short of a pie.

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“Roberts is no kid. What his Ph.D. is in, I don’t know; but if it’s economics, he skipped some required reading: The Wealth of Nations, Book IV, Chapter 8, ‘Consumption is the sole end and purpose of all production.’”

There is nothing a firm can do to restore inadequate demand caused by the high unemployment produced by a recession.  The result is enormous waste.  Firms have enormous unused productive capacity.  Workers want to work but cannot find jobs (or find only part-time jobs).  They cannot find jobs because firms won’t employ sufficient workers to end underemployment for the same reason that they will not produce at capacity.  When they produce fewer goods they need fewer workers.

Only a government with a sovereign currency, because it is not profit-driven and is not subject to bond vigilantes, has the “right, means, and, indeed the duty” to act in a recession to provide the otherwise inadequate demand that can make it possible for firms to profitably “make more things” (because the demand will exist for consumers to purchase them) and hire more workers.  That is what a properly designed stimulus program does and why it is a positive-sum strategy.  Obama, the proponent of stimulus in 2009, helped firms make more things.  It was legislators who shared O’Rourke’s love of negative-sum austerity who reduced the vital stimulus.  O’Rourke’s preferred policy has kept firms from making as many things and hiring as many workers as they would have if Obama’s proposed stimulus program had not been weakened by Congress.

Conclusion

The policies that O’Rourke promotes are the problem.  He has shown a remarkable ability to support a wide range of the world’s most destructive negative-sum policies.  The more he witnesses such policies inflict terrible losses, the more passionately he embraces his dogmas and the more breezily he dismisses the “stupidity” of those whose policies have succeeded and proved positive-sum.  There are excellent grounds for criticizing many of Obama’s policies.  O’Rourke’s column is remarkable for not presenting any of those grounds and relying instead on falsely ascribing policies to Obama where he actually supported the opposite (successful) policy.

William Black is the author of The Best Way to Rob a Bank Is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. He spent years working on regulatory policy and fraud prevention as executive director of the Institute for Fraud Prevention, litigation director of the Federal Home Loan Bank Board and deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.