The further to the left or the right you move, the more your lens on life distorts.

Saturday, December 03, 2011

Reality Distortion Field

In his fascinating biography of Apple’s founder, Walter Isaccson writes about Steve Job’s “reality distortion field.” In essence, Job’s had the unique ability to discard the reality of a situation and to demand that co-workers and others substitute his perception of reality. In some cases, this worked well, and through sheer force of will (along with Herculean efforts by dedicated staff), his dreams became reality. But not always.

Leftist economist Paul Krugman suffers from a different kind of reality distortion field. Discarding 100 years of economic theory, centuries of history, and common sense, Krugman tries to persuade his New York Times readers that Europe is in trouble because it needs to borrow more, spend more, and otherwise expand the size, scope, and control of its already bloated governments. Let's step inside Krugman's reality distortion field:

How did things [in Europe] go so wrong? The answer you hear all the time is that the euro crisis was caused by fiscal irresponsibility. Turn on your TV and you’re very likely to find some pundit declaring that if America doesn’t slash spending we’ll end up like Greece. Greeeeeece!

But the truth is nearly the opposite. Although Europe’s leaders continue to insist that the problem is too much spending in debtor nations, the real problem is too little spending in Europe as a whole. And their efforts to fix matters by demanding ever harsher austerity have played a major role in making the situation worse.

That’s the ticket. Greece (not mention Italy, Spain and others) should jettison any attempt at (Krugman hates this word) austerity and spend, spend, spend. They should borrow so they can spend. They should tax so they can spend. They should spend to expand government benefits. They should spend to service the enormous carrying costs associated with their new debt, and plow ahead, waiting for the utopian day when all of the spending will somehow save them. No worries about running out of money, after all, there will always be a lender to provide more Euros. Won’t there?

For a moment, I'll channel Krugman's reality distortion field and propose a metaphor: Following Krugman’s arguments, a crystal meth addict should not seek treatment, but rather up his dose of crystal meth. After all, it will make him frenetic, and maybe, he’ll become more productive and happier, and then, miracle of miracles, he’ll break his meth habit. He'll do this not by the austerity of treatment, but by increasing his use of crystal meth. I’m sure most meth users would agree with that, but then again, like Krugman, their judgment is just a little impaired.

But I digress. There’s a reason for Krugman’s reality distortion field. He’s working very hard to convince his readers that the USA will not become “Greeeeeece!” He writes:
For in America, as in Europe, the economy is being dragged down by troubled debtors — in our case, mainly homeowners. And here, too, we desperately need expansionary fiscal and monetary policies to support the economy as these debtors struggle back to financial health. Yet, as in Europe, public discourse is dominated by deficit scolds and inflation obsessives.

So, almost all of us who are concerned about profligate spending to feed big government are nothing more than “deficit scolds and inflation obsessives.” After all, growing government even bigger and spending trillions more than we have is a good idea. It’ll save us! All of us “scolds and obsessives” simply have to distort reality and everything will be A-OK.