Kevlar Ideas: Box of Rocks

At the risk of repeating myself, I am about to repeat myself.

In a previous post, I quoted our President Bush:

"I think actually the spending on the war might help with jobs, because we're buying equipment and people are working. I think this economy is down because we built too many houses."

I resisted the urge to start pontificating on this again. (For a good explanation of what's called The Broken Window Fallacy, take a look here or here.) That is, until I just couldn't take it any more.

Here's what tipped the cart, or broke the camel's back, or perhaps broke the cart and tipped the camel, I'm not sure which. A Reuters article appeared this fine second day of March, telling the story of one Joseph Stiglitz, a Nobel-winning economist, and his book "The Three Trillion Dollar War."

"It used to be thought that wars are good for the economy. No economist really believes that anymore," Stiglitz said in an interview. Asked if the war has contributed to the U.S. slowdown, Stiglitz said, "Very much so. To offset that depressing effect, the Fed has flooded the economy with liquidity and the regulators looked the other way when very imprudent lending was going up," Stiglitz said. "We were living on borrowed money and borrowed time and eventually a day of reckoning had to come, and it has now come."

And while we're talking about Reuters articles, take a look at this one:

The dollar's sharp slide deepened on Monday when it fell to a record low against a basket of major currencies as expectations for more aggressive Federal Reserve interest rate cuts ignited selling of the U.S. currency.

When you really start to look at all of this, you can't help but wonder what on earth the people we trust to make these decisions are thinking. It starts to raise questions in my mind about the efficacy of a representative democracy to address the needs of the People. Of course, the main alternative is a pure democracy, which is akin to mob rule. So here, perhaps, is the Achilles Heel of the representative system: water cannot rise above its source. In other words, if the People are about as conscious as a box of rocks, we're probably going to end up with leaders of the same calibre. But, if we unplug ourselves from the social morphine delivered to us via all our little distractions, then who knows what we might become aware of.