He's not PJ O'Rourke, and this week regular columnist Bernard Darnton isn't Bastiat either ...
Shortly before being sworn in as Prime Minister yesterday, John Key was given a briefing on the state of the economy by Treasury. “It’s not Armageddon,” said John.
According to the Book of Revelation, Armageddon would mean “a beast coming out of the sea. It [will have] ten horns and seven heads... The beast [will look] like a leopard, with feet like a bear’s feet and a mouth like a lion’s mouth.”
While having this creature sloshing its way out of the harbour and lurching up Lambton Quay would have spiced up the pre-election fiscal update no end, it would also have made it a lot harder to hide the bad news in the small print. imagine if you will ...
The businessmen of the earth also cry and mourn, because no one buys their goods any longer; no one buys their gold, silver, precious stones, and pearls... The businessmen who became rich from doing business in that city will stand a long way off, because they are afraid of sharing in her suffering... In one hour she has lost all this wealth!
Grim. But if you’re a glass-half-full sort of person you’re probably already thinking, “Hold on, maybe Armageddon wouldn’t be so bad.”
If you see an axe sticking out of the former Prime Minister’s electorate office window and think, “Hey, that’s got to be good for the glaziers of Mt Albert,” then perhaps, you're thinking, Armageddon could be even better!
If Babylon gets consumed by vengeful fire we’re obviously going to need a new one. And how much does a new brothel cost? Not to mention all the drinking dens and the heathen temples? That would add up to a significant sum. A few trillion in fiscal stimulus to replace all those iniquitous lairs would really boost demand! And having all those boudoir decorators and idol sculptors gainfully employed would certainly revive flagging consumer confidence. Beelzebub and his demonic host would seem quite the public benefactors.
The trouble is of course that government guarantees against acts of God have to be paid for. Somehow. Just nominating a Minister for Infrastructure doesn’t cause new casinos and bath houses to appear out of thin air. The labour and materials have to be redirected from other projects. We’ll never know what real entrepreneurs could have done with the same resources.
Even those who espouse stimulus packages and other wasteful spending on nonsense projects don’t really believe in their own prescription. If they really believed that providing stimulus to consume was all that was required to improve the economy then surely they’d ensure their own future wealth with a little home macroeconomics.
They’d burn down their houses, take out mortgages on the land, and spend the loans on rebuilding the houses. Hey presto – economic miracle.
It’s not Armageddon, so your house probably won’t get burnt down by righteous angels, Satan’s armies, or enthusiastic but misguided macroeconomists. But if you’re after stimulus, you may get the pleasures of Babylon piped to your home over a shiny new (but not strictly necessary) fibre-optic broadband network. It will remain forever unseen what those billions would have been spent on if left in their owners’ hands.