There is an old-ish parable about a drunkard looking for his keys under a light post. He was looking for the keys under the post, not because he thought they were there, but because that was were the light was best.
This parable has manifested into the Streetlight Effect which is
a type of observational bias that occurs when people only search for something where it is easiest to look.
This streetlight effect is the plague that has infected developed country politics and public policy. In Australia, this bias infects major areas of government from health to education to energy.
Post budget, there is no better example than the insane belief that spending more tax payer dollars will ipso facto deliver better results. And why is this so? Because when it comes to the areas that governments meddle, results are hard to measure but spending isn’t.
Put together a bunch of intellectually lazy and philosophically moribund politicians with a bunch of bureaucrats who are disconnected from outcomes (neither punished for failure nor rewarded for success) and what do you get? You get, actually we all get, a public sector that eats the private sector.
The whole deception of income inequality is yet another area of “public policy” that is perverted by the streetlight effect.
When people (usually ALP, Greens, Black Handers, ABC, academics, those who live off the wealth created by the productive part of the economy) prattle on about income inequality, they are not saying that the poor are getting poorer. They can’t be saying that given minimum wage increases, welfare, Gonksi, blah blah. What they are really saying is that the rich are getting richer faster than the poor are getting richer. And according to them that’s just not fair!
That’s right. The poor are getting richer. Air conditioning, public housing, flat screen televisions. The poor have never had it better. This is not to say that they have it great, but no-one is starving and no-one is denied essential health care. If you want to know what poor is, go to a developing country.
But back to the point. One would think that it would be better to focus on making the poor richer than to make the rich poorer. But creating wealth is hard. Taking it away is easy. So what do our political overlords do? They do what’s easy and their tool of preference is tax. Tax the rich. Tax business. Tax the wealth creators. Simple. Pulling the roof down is always easier than lifting the floor.
To borrow Boetcker’s 10 Cannots:
- You cannot bring about prosperity by discouraging thrift.
- You cannot strengthen the weak by weakening the strong.
- You cannot help little men by tearing down big men.
- You cannot lift the wage earner by pulling down the wage payer.
- You cannot help the poor by destroying the rich.
- You cannot establish sound security on borrowed money.
- You cannot further the brotherhood of man by inciting class hatred.
- You cannot keep out of trouble by spending more than you earn.
- You cannot build character and courage by destroying men’s initiative and independence.
- And you cannot help men permanently by doing for them what they can and should do for themselves.
One day in the future, having destroyed the productive economic edifice, these wise people, living comfortably off their government guaranteed defined benefit indexed superannuation schemes may possible reflect on what damaged they have caused. But Spartacus somehow doubts it.
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