It Ain't So

The saying goes, "It ain't what you don't know, it's what you know that ain't so." For example, in researching this phrase, I discovered that it is usually attributed to Mark Twain, but was actually originated by Josh Billings, Mark Twain was paraphrasing him.

Regardless of who wrote it, it is still true. I could go on about other trivial examples. For example, everyone knows that Marconi invented the radio, but Nicola Telsa had a working radio controlled boat five years before the radio was "invented." In the early 1940's, the Supreme Court decided that having a working radio controlled boat made Telsa the inventor, not Marconi.

These are trivial examples, but much less trivial examples can be found. For example, I saw one reference that indicated part of the reason the First World War was so devastating in Europe is because the European Military decided that the carnage of the U.S. Civil war could not happen in Europe because they decided that the carnage was due to the non-professional military that the United States used to conduct the war. I guess what they knew wasn't so.

Also, in 1929 the everyone knows that the stock market crash caused the Great Depression. Yet, in the 1980's there was another drop in the value of the stock market which was even larger, but the drop was completely absorbed in less than three years, as I recall. Of course, congress used the excuse of the stock market to grab power, which congress is good at.

The real cause is, as I have stated elsewhere, the real cause of the Great Depression was caused by the many attempts by people to get something for nothing. Unfortunately, that attitude was never addressed, so the depression continued until world events overtook it.

Therefore, the government decided to use some untested economic theory to "stimulate the economy" and Roosevelt decided to increase taxes, and use make-work jobs. This didn't work, for the same reason the current "wisdom" that says tax cuts stimulate the economy, as I have stated elsewhere. This was yet another chance for the government to grab power. In this case, at least some of the grab was declared unconstitutional.

Many people who can see this will believe another false fact. That is, "the Great Depression was ended when the Second World War stimulated the economy." Therefore, an excuse for the Viet Nam war was that it was needed to stimulate the economy. I suspect that part of the reason Bush justified his "war on Terror" is that it would stimulate the economy.

The problem is that I know of no case where war has stimulated the economy. As my Economy professor noted, the economy is not stimulated because much more is destroyed than is created. The Second World War looked like it stimulated the economy because before the United States entered the war, Europe had destroyed its industrial base. Therefore, they had no choice but to come to the United States to buy things, and the influx of cash stimulated the economy. Unfortunately, the wrong lesson was learned by a lot of people, hence war became an activity that "stimulated the economy." Another "lesson" miss-learned.

This can be seen, as one looks at what happened when the European economy started to recover. They recovered, and the United States started to go down hill in the 1960's and 70's.

In the 1980's, the lesson was learned that Reagan's military spending defeated the Soviet Union, and I still hear references to that "fact." The problem is that it isn't so. I've heard many analysts that point out that all the military spending may have hastened the inevitable, perhaps by as much as two years, which is insignificant in view of the cost.

The actual cause of the demise of the Soviet Union is Mikhail Gorbachov, or, probably more honestly, a system which didn't work. That is, the underlying theory of Communism (Bolshevikism, to be more precise, not communism as it is commonly practice in some communities in the Unite States) if flawed. It assumes that "from each according to his abilities, to each according to his needs." The problem is that, whereas a lot of people will work whether or not there is some reward (that is, the work itself is the reward) there are also many people who will not do useful work. Therefore, the needed goods and services are not produced, and cannot be consumed. This whole system was unstable.

I suspect that if the United States had not apposed the Soviet Union, it would have collapsed even sooner. That is, part of the reason the Soviet Union collapsed was Viet Nam. That is, the United States was humiliated in Viet Nam, and people of the United States learned the lesson that you cannot control a country without popular support. (Hey, not every lesson was miss-learned, some were forgotten.) This marked the first time since the death of Stalin that they Soviet Union could not blame any hardships on the "war with the United States," (just as currently the Bush administration blames any hardships on the "war on terror.") If this had not been so, then the people of the Soviet Union would have been able to ask the hard questions, such as "Why?" Why did the United States with its "flawed" economic system have all these things that the people of the Soviet Union wanted, but didn't have. Russia really has more natural resources than the United States.

Reagan also popularized the lesson that tax cuts always stimulate the economy. I have already written on this subject. Tax cuts will not stimulate the economy unless the tax cut is accompanied by a corresponding, and larger, cut in spending so that the budget deficit goes down. In the 1980's we suffered through eight years of decline because of this mistaken belief. Reagan cut the inflation by making everyone's life so miserable that no one wanted to spend anything. They had no money. This was finally brought to an end by George Bush, Sr. and Bill Clinton, who increased taxes, moving toward a balance budget, and the economy was stimulated. Of course, in his zeal to undo everything Clinton did, Bush, jr, removed the tax increases and more, with the inevitable economic decline.

Of course, Bush used the "war on terror" to justify his decline. After all, there was the September 11 bombing. What people didn't see (not because it wasn't published, but because they didn't look) was all the charts which show that the economic impact of September 11, 2001, was entirely absorbed by the economy by December, 2001. This is not obvious because the economic decline was well underway by September 11, so a full recovery did not bring the United States up to where it was before. Of course, the government used this as an excuse to cease more power, as they so often do.

Another lesson miss-learned is that corporate greed cause the export of programming jobs to India. Now, I don't want to minimize my contempt for corporate greed, for example in CEO salaries, etc. As I stated at the beginning, this is another attempt to get resources over and above that generated by the goods and services the CEO's produce. However, this greed is not what has driven programming jobs overseas. Yesterday I wrote an essay on this, which I might yet put on my WEB site for all to see. While CEO's are often shortsighted, and greedy, they are, for the most part, not stupid. The workers in the United States, including the programmers, when allowed to work quit easily outproduce workers anywhere. That is, they get more money, but they are also worth it because they produce more.

CEO's have concluded that it is better to go with less productive workers in other countries because the government of the United States has made it so dangerous to work here. In the case of software development, if they congress were to roll back the law to 1975, or even 1995, no company would think of developing software elsewhere unless they couldn't find the workers in the United States.

Although I do not see where I have written it, I have predicted the demise of software development in the United States as early as 1998. The laws that have been passed have actively discouraged software development. The Bush administrations decision to let Microsoft off the hook without holding their monopoly powers in check have had a lot to do with it. (Being somewhat Libertarian-leaning, I would prefer the declaration that the copyright law, etc., does not apply to Microsoft as an appropriate punishment. The theory being that since Microsoft is using its copyrights to stifle the advancement of science and "the useful arts" it is unconstitutional for the copyright law to apply.)

In recent years, there have been many other lessons miss-learned. Iraq is a threat to the United States. (Oops, maybe just it is a good thing to take out Sadam Hussain.) We live in a dangerous world (even as the crime rate drops). God is powerless, so we need to do his bidding (a favorite of the so-called religious right). (After all, if God is all-powerful, why should I worry about evil?) etc.

When will we learn?