Big Head Press

L. Neil Smith's
Number 472, June 15, 2008

"Double or triple the price of gas, and that will
lock people down far more effectively than will
concentration camps and secret police."

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Comment to "None Dare Call It Treason, Posted March 17, 2008 10:24 PM by Justin Ptak"
by Ohhh Henry

[Publisher's Note: we recently found the following entry, attributed to "Ohhh Henry" on the "Mises Economics Blog" at the Ludwig von Mises Instutute website and publish it here with permission of the author.]

My buddy wrote me this after I complained about the Bear-Stearns bailout:

"Keep your morality out of the picture.

"Yes, the taxpayer is going to take the shaft, BUT, the present administration, rightly, believes this is far better than the consequences.

"This was done for a specific reason—the amount wasn't pulled out of thin air.

"It will be easier to correct the present wrongs in a functioning system than in a system that is in total collapse."

To which I replied:

But morality is the only issue. Nothing else matters. It's not that I'm a Sunday school teacher and I'm telling you that you have to be a good boy because God is watching. The fact is, the moral course is the only practical solution, because to permit immorality (or worse, to reward immorality) in the name of expediency will only lead to more immorality.

Consider a village in which most people build their houses and shops out of solid lumber, building a house which is no bigger than what can be built with the lumber at hand. But one guy builds a house which is far bigger and taller than all the other houses, which he accomplishes by splitting all his lumber lengthwise, then splitting it again (using a mechanical process he calls "leverage"), until he's built a skyscraper out of nothing but toothpicks. For a while he looks like the richest and smartest man in the village. People line up at his door to rent apartments and shops in his tower, and they apply for jobs at businesses in the tower, and they build their houses close to the tower. But when a strong wind comes up, the tower starts to topple.

The tower builder has a private chat with the mayor, and the mayor announces: "This tower is too big to fall, and too many people will be negatively affected by its collapse. As of right now, I and my henchmen are going to start taking shavings off the wood in everybody's house throughout the village, and then we will use the wood we collect to prop up the tower. This way the hardship will distributed equitably and there will be no catastrophic collapse."

Observe the effects which result from this:

1) Everyone's house is now unstable, even the solid ones which were built by prudent people.

2) A tower built out of toothpicks can never be fixed by propping it up willy-nilly with more toothpicks. It will remain fragile until it finally collapses under its own weight, or is burned down in the war (see below).

3) No one will bother building solid houses or acquiring or saving lumber for a house any more, because why bother when the mayor will confiscate it for his buddies? They will throw up their hands and wait for the mayor to provide them with Lumber Relief.

4) The mayor will blame the resulting lumber shortage on the people in the next village, and will whip up his people to get them to attack the other village. (It so happens that the village with the tower is named "Oosa" and the village with the wood is called "Opek".). Chaos and bloodshed result, two entire villages go up in smoke, and for another generation there is no wood to be had for buildings.



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