Keynesians Use Thomas Edison's Advice For Destruction

By, Chris Rossini

Thomas Edison is known to have said the following: "I have not failed. I've just found 10,000 ways that won't work.”

Unfortunately, instead of Keynesians admitting defeat (like they should have at least 40 years ago) they're gonna go all Thomas Edison on us:

If Abenomics fails, it will be for the same reason that every other idea failed: because it hasn't been tried.

— Joseph Weisenthal (@TheStalwart) June 3, 2013

Yes...the tweet itself doesn't make sense if read literally.

But here is what Wiesenthal is really saying. He wrote back in March:

What's going on in Japan is inevitably going to be one of the greatest economics experiments in history.

[...]

No matter what happens, this will be a great experiment.

If it all works, great.

If it doesn't, it will be a great lesson on the limitations of policy — which may either be technical limitations on what monetary policy can achieve, or limitations based on politics and will.

What is this grand "experiment" called "Abenomics"?

One of Weisenthal's colleagues summarized it nicely (my emphasis):

The plan – called "Abenomics," named after newly-elected Prime Minister Shinzō Abe – is three-fold. It involves a massive increase in fiscal stimulus through government spending, a massive increase in monetary stimulus through unconventional central bank policy, and a reform program aimed at making structural improvements to the Japanese economy.

I'll put it into plain english: Picture a hospital patient lying on his death bed, with tubes hanging out everywhere. All of a sudden, a doctor takes a running start, sprints over and punches the patient right in the face.

Every normal human being would be shocked in horror.

Well, the Japanese government are playing the doctor with an economy that they've already bled dry.

They're going to:

• Withdraw resources from whatever productivity is left in the private sector and divert those resources into the unproductive and waste-driven government sector. 
• Massively debase the yen by printing it in droves. This produces many evils, chief of which are diluting the purchasing power and savings of every Japanese individual, as well as setting in motion the boom/bust cycle.
• "Reform," which in government speak means "shuffle the deck chairs". The only true reform that governments can make is to reel in their destruction and get out of the way. Obviously, this isn't the case here at all.

This "experiment" turns out to be nothing new at all, but the same old same old. So welcome Japanese citizens to the world of being a lab rat. We Americans have been poked and prodded ourselves for many years, and appreciate your company.

Failed ideas die hard (e.g. Marx's ideas died hard). Unfortunately, the mad scientist Keynesians will refuse to give up until economic law forces them.

Sucks for everyone else in the meantime.

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