Writing in Forbes, Bill Bonner notes that “the financial scam that every American falls for” is the one in which politicians promise to improve economic outcomes using politics. “Rare was the man,” he writes, “such as Robert Lucas or Murray Rothbard, who pointed out that you could not really improve economic results with political means.” He continues:
There are economic means, and there are political means. There is persuasion and there is force. There are civilized ways and barbaric ones.
The economist is a harmless crank as long as he is just peeping through the window, but when he undertakes to get people to do what he wants–either by offering them money that is not his own, by defrauding them with artificially low interest rates, or by printing up money that is not backed by something of real value such as gold–he has crossed over to the dark side. He has moved to political means to get what he wants. He has become a jackass
Keynesian “improvements” were applied in the 1920s — when then Fed governor Ben Strong decided to give the economy a little “coup de whiskey” — and later in the 1930s when the stock market was recovering from the hangover.
The results were predictably disastrous. And along came other economists with their own bad ideas. Rare was the man, such as Robert Lucas or Murray Rothbard, who pointed out that you could not really improve economic results with political means.