Authored by Rob Smith via RealClearMarkets.com,
It was a beautiful midsummer late afternoon. I had just checked into the “Inn” in Woodstock, Vermont. I grabbed my fly rod and hurried over to a picturesque covered bridge and waded down into the cool rushing water. I stuck a $20 cigar (spiced Maduro wrapper) in my mouth. With long sweeping rhythmic motions, I cast the fly wherever I wanted. It was a scene out of a Norman Rockwell illustration. Could life be any better?
After an hour or so, an old codger with a thick New England accent approached me and said, “there haven’t been any fish in this brook for 50 years.” In the south, we use “creek” to describe any tributary flowing off a river. At first, I was confused and merely retorted “Sir?” He repeated himself. Even though I hadn’t caught anything, I was enjoying myself, but now the fun was over, so I limped back to the Woodstock Inn. Had he not told me there were no fish, I would have stayed in that spot until well after dark and would have thoroughly enjoyed every cast!
The problem we have in America is many of our political elites are fishing over streams with no fish. They enjoy the covered bridges, the cigars and the feelings and pleasure derived from their efforts, but there ain’t no fish to be caught. The purpose of fishing is to catch fish. The purpose of work is to produce an intended, profitable result, but the nimrods and pinheads in Washington and academia don’t understand this. It’s all about how they “feel” when making beautiful casts under a New England covered bridge. When I learned that were no fish in the brook, I stopped fishing, but our academics and blowhard elites keep casting, oblivious to the fact that their casts will never produce any fish.
It’s like Bill Murray in the Groundhog’s Day movie. Repeatedly, the mediocre mullets in Washington are wrong about everything, and I mean absolutely everything! The gullible among us believe they will catch fish and feed us, so we watch them cast in awe at the bucolic scenery, even though it is an absolute certainty that they will never even get a nibble.
Has the Congressional Budget Office ever been even close to right in its projections? Was Anthony Fauci right about anything? Have you ever read the Congressional Record concerning the 1935 Social Security Act? How about the trillion dollars spent in the Middle East to turn barbaric tribesmen into Jeffersonian idealists via nation building? The formation of the Department of Education in 1979 sure turned out well. $68 billion/year is being spent and our nation’s youth can’t find the United States on a map of the world. Buy hey, at least they are learning that there are 168 genders, and boys can rest assured if they wish to cut their nuts off and become a semi-woman, the DOE is there for them. The secret $1.8 billion in cash the Obama administration gave to the mullahs in Iran was a real foreign policy home run. It completely stopped Iran’s state sponsored terrorism and desire to see Israel blown off the map. Not. The Green New Deal is fun; pretending that the world is going to end unless Americans give up all their property to fanatic worshipers of Dr. Evil, eh, I mean Klaus Schwab. How many times has the Malthusian Left been proven wrong about their climate change predictions? Remember Carl Sagan and the nuclear winter? Yet, they keep fishing. As I write this the philosopher kings at the Federal Reserve are actively trying to destroy the stock market, the housing market and to keep wages from going up in efforts to “help” us. Why Lord, why? Why do so many put their faith in government? Is there no historical memory? Here’s a quick history and economics lesson. Memorize this simple maxim of economics and you will know more than any graduate of Harvard’s Kennedy School. “The government fu#ks up everything it touches.”
It works like this. The government ignores the fact that individuals can look out for themselves and that markets work. Thus, it enacts legislation to fix a perceived problem, but the legislation does not fix the problem. It creates much bigger problems (see the American health care system). Then to fix the much bigger problem that it created, it enacts more legislation and Groundhog’s Day never ends.
All of this is on full display with Congress about to pass H.R.7178, the Chips For America Act. Remember when Jim Jones had all his followers in Guyana drink the Suicide Punch. That’s what our government did with its response to the Coronavirus. Instead of doing nothing and letting individuals make decisions in their best interests, our government shut down the world economy. Now we have a semi-conductor chip shortage. Well, DUH, you dumb sons of a bitches. What did you think would happen? The stupidity is mind blowing.
The reason there were no chip supply line shortages pre-fake-pandemic is because millions of “invisible hands” from all over the world provided the needs for a world-wide market. It’s the miracle of markets, and each year the government did not intervene “by trying to help the chip market,” the better the chips and the cheaper the chips became per unit of processing power. Yes, most of these chips were produced overseas. Big deal. That’s the way free trade works. It works the way it does because the people who are busting their ass and spending their own money in a particular industry want to buy the chips they buy from the people selling them. Trade is voluntary. Opposite parties to a transaction engage in trade with one another because they both win. It’s a marvelous, beautiful system.
Now what’s going to happen now that the U.S. government has stuck its nose into the semi-conductor market. Remember when the United States had restrictive tariffs and limits on foreign cars. Everything made in Detroit was a pile of junk; think “Plymouth Duster.” Once Detroit had to compete with Japan and Germany, American cars got a whole lot better and much cheaper as better cars produced 2 to 3 times more usable miles and lasted longer.
So what’s to become of the price and quality of semi-conductor chips? This bill carries a $280 billion cost. Doesn’t this crowd out private investment? Isn’t it better to leave money in the private sector such that overall investment can flow to its most productive use? What are the potential pitfalls and unintended consequences of this legislation? When has a government industrial policy, picking winners and losers ever worked? Why can’t Congress simply get out of the way, reduce its regulatory burden on business and let the market solve the chip shortage? By the time this Leviathan Legislation begins to bear any fruit, won’t market forces have already fixed the chip shortage?
The opening paragraph of the “Chips Act” states that it “establishes investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security.” Government investment in preferred industries! Yeah, that worked real well with Solyndra, the Synthetic Fuels Corporation, the Clinch River Breeder Reactor and I could go on. When Britain nationalized all its industries after WW II that too was a brilliant move, as the once richest nation in the world had to ration food to keep its people from starving (of course rationing works about as well as rent control, but hey try talking sense to someone like Clement Atlee).
Who can be against research and development? Um, eh Rob Smith for one. This isn’t private sector research and development, this is government research and development, which means politicization to control the thoughts and actions of the chosen recipients. These recipients don’t have any skin in the game as they do not own the chip companies. This is like paying me to research the North American Snail Darter. I don’t care about little salamanders, I just want to please my benefactors because I want more money. Pay me and I will tell you whatever you want to hear.
$80 billion is going to the National Research Foundation, the sister entity of the National Institute of Health. You know, the same think tank of brilliant scientists that told us the vaccines worked and wouldn’t kill people! The same government experts who created the chip shortage via its advice to ruin the world economy. This bill is completely unnecessary, the chip shortage problem will solve itself. $280 billion will flow towards a protected class of government sycophants in a “scratch my back I’ll scratch your back” corrupt system of political patronage.
It is insanity to fish in a stream where there are no fish. It is even more insane to spend $280 billion to fix a problem that does not need fixing.