September 17, 2008

Bullshit Economics

Definition of Bullshit: 

It is impossible for someone to lie unless he thinks he knows the truth. Producing bullshit requires no such conviction. A person who lies is thereby responding to the truth, and he is to that extent respectful of it. When an honest man speaks, he says only what he believes to be true; and for the liar, it is correspondingly indispensable that he considers his statements to be false. For the bullshitter, however, all these bets are off: he is neither on the side of the true nor on the side of the false. His eye is not on the facts at all, as the eyes of the honest man and of the liar are, except insofar as they may be pertinent to his interest in getting away with what he says. He does not care whether the things he says describe reality correctly. He just picks them out, or makes them up, to suit his purpose.
~Harry Frankfurt

Example of Bullshit:

The markets are not self-correcting. … If they continue to not self-correct over the next several months, is there a federal response? There might be more federal intervention that?s needed. We?ll proceed cautiously?
~Aide to Nancy Pelosi

AIG gets bailed, Nancy speculates on whether she should turn Freddie and Fannie into “quasi-governmental organizations” or maybe a “quasi-nongovernmental organizations”?they’ll be “quasi”-something, that we know for sure?and Barney Frank and Henry Waxman, two of our favorites, form a congressional committee to “investigate” the financial crisis, in which they’ll, no doubt, denounce the greddy capitalist and uncaring Republicans while expanding their own regulatory powers and installing a new bureaucracy or two. And it’s all to be based on the bullshit economic un-logic of “self-correcting markets.”

Quite frankly, if the fact that firms backed by the power of the Federal government collapsed in a matter of days doesn’t definitively prove that markets are “self-correcting,” then I don’t know what would.

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