A Dog's Life Under Bad Economists

I slid the imitation sports car into Funland, clipped a pack of flabby college boys, winked at some Spring Break bikini babes and ordered two corn dogs to go.

Man cannot live by corn dogs alone, so I bought a six of suds and motored back to the Alamo to study the day's news clippings under the dusk-to-dawn siege of Mexican accordion music.

They mean to drive us gringos out with that wretched racket, having learned the tactic when we blared rock music to flush Noriega out of Panama.

The day's news had created a craving for corn dogs. I anticipated a price increase, perhaps to the price of steak.

With the price of corn we have an example of what the great Frederic Bastiat called bad economics.

Bad economists tout what is seen. Good economists anticipate what is not seen.

The federal government, the chief employer of bad economists, decided to encourage ethanol production to allegedly reduce oil imports. In response, corn growers devoted more acreage to corn.

Looks good. That is what we see.

What we may not see is that ethanol producers and corn growers are subsidized by taxpayers. When money is taken from a taxpayer and given to producers of corn and ethanol, the taxpayer has less money to spend on other goods, such as shoes. The ethanol business prospers. The shoe business suffers.

Further, the taxpayer, who previously had money for fuel and shoes, must now forego the shoes. Not only does the shoe business suffer, but the taxpayer gets the use of one less product.

Further still, land diverted to corn leaves less acreage for other crops, such as wheat. So the prices of other foods rise. Such is the effect of the government's corn/ethanol charity, both here and abroad, that the price of corn itself has risen, which prompted a Mexican tortilla crisis as the price of that dietary staple skyrocketed.

That should flush more hungry amigos northward to the legendary land of plenty, another unseen consequence.

Amidst the amber waves of grain we have our own corn crisis.

By some estimates, 25 percent of the goods in our grocery stores, including steak and corn dogs, directly or indirectly contain corn. Now, food prices are up, the result of bad economics.

We will not get into this program's effect on the prices of farmland, oil and hundreds of other things.

Bad economists with Ivy League doctorates cannot see these effects. Good economists can.

The news clippings I read at the Alamo involved the current mortgage loan crisis. It too is the handiwork of the government's bad economists.

Three years ago, the nation's Counterfeiter-In-Chief, the head of the Federal Reserve, urged Americans to take out adjustable rate mortgages. He encouraged lenders to create more imaginative home loans. He goosed the supply of money and credit to make it possible.

What did we see? An apparently booming economy, a mirage of monetary inflation.

What did we not see? The bust awaiting government-induced booms, in this case falling real estate prices, record mortgage delinquencies, lost jobs and a predicted 1.5 million homeowners facing foreclosure.

We did not see the consequences now rippling throughout the economy, wrecking for our fellow citizens the American dream.

Predictably and regrettably, politicians howl for action. Expect to pay dearly to clean up their latest mess.

Once again, they will set sail on a sunny sea of wondrous promises, then wreck us on the stormy shoals of unseen consequences.

Until we flush the unworthy from economics, until we wrest our money from their hands, until we demand our free market liberty, until then, get your corn dogs while you can.

Phil Lucas is executive editor of The News Herald in Panama City, Fla. Contact him at plucas@pcnh.com. To find out more about Lucas and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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