Why Are World Leaders So Incompetent?
The stupefactions and perverse incentives that arise from unlimited debt financing.
The great economist and philosopher, Thomas Sowell, has often pointed out that there are no final solutions to the problems that beset individual humans and civilizations, but only tradeoffs. In order to obtain something of value, it is invariably necessary to sacrifice something else.
We know this to be true from the experience of our daily lives. If you want to get a good night’s sleep, you must sacrifice late-night socializing. If you want to be physically fit, you must sacrifice eating rich foods. If you want to save money, you must sacrifice spending on luxuries. If you want to wake up with a clear head, you must sacrifice drinking your favorite bottle of Burgundy.
There was a time not so terribly long when the ladies and gentlemen who sought high office understood that the same basic principles of private household economy apply to the state. The government cannot write checks for every grand scheme in every matter domestic and foreign. The imperative to spend money wisely disciplines not only one’s habits, but also one’s mind.
The opposite is true when no limit is placed on spending. Like a 21-year-old trust funder with a vast bank account and a cocaine habit, a government with no spending limits invariably becomes undisciplined and stupid and loses sight of reality. As bad as this is, it’s just the beginning of the problem. Soon unscrupulous lobbyists and their dumb and venal politician friends realize that with no brakes on the printing press, it actually PAYS to mismanage things. At this point, PERVERSE INCENTIVES start popping up like mushrooms after a heavy rainstorm.
1). Why MANAGE foreign affairs when one can bluster and blunder around and start wars that are extremely profitable for the defense industry?
2). Why MANAGE financial affairs when a FINANCIAL CRISIS will trigger spectacular government bailouts?
3). Why TREAT a respiratory viral illness with cheap, repurposed FDA-approved drugs when the government is poised to spend hundreds of billions on a novel vaccine with no product liability for the manufacturers?
Indeed, why do ANYTHING properly when the state is ALWAYS ready to write vast checks to clean up gigantic messes that ensue from doing everything foolishly?
It seems to me that my point is illustrated by the following chart.
Since all fiscal discipline went by the board during the Financial Crisis of 2008, the United States has been struck by wave after wave of mind-bogglingly stupid social experiments, needless conflicts, destructive ideologies, terrible habits, childish tantrums, and a departure of common sense from public affairs.
Historically, such petulant folly has eventually been corrected by a combination of economic depression and war that kills a bunch of people and sobers the rest. I hope it doesn’t come to that, but when I look at the demented clowns running this country, I fear that terrible things are in store for us.