Pierre Lemieux had an op-ed in the Financial Post last month with a timely title: The brave new world of stimulus:
‘Aggregate demand” drives “the economy.” If it falters, government stimulus is necessary. Welcome to the economics of the Brave New World!
Aldous Huxley’s imaginary world is built around slogans like “Ending is better than mending. The more stitches, the less riches.” Don’t repair your old clothes, buy new ones. Boost consumption. “Otherwise the wheels stop turning.” The more we consume, the richer we are. It is, of course, the other way around: The richer we are, the more we can consume. Consumption cannot create opportunities and wealth out of nothing. If it could, consumers in poor countries would learn the recipe and soon become as rich as Croesus.
Pierre’s not too far off the mark, because, in California, the authorities are banning used children’s clothing and toys over lead fears, while in Britain, there’s a government-imposed incandescent lightbulb famine that will lead to people switching over to more “energy efficient” bulbs.
We normally castigate automakers and consumer goods manufacturers for their planned obsolescence. But governments can play that game, too. The U.S. Government is propping up electronics manufacturers through the legislated obsolescence of analog tv as HD-Day approaches.
HD-Day is a day of Huxley-esque flavour. It’s the day the government threatens to cut off one’s access to the national soma if one fails to consume. I think I see the process. I am betting that Obama can re-ignite the housing market in the U.S. by outlawing carpet, linoleum and fibreglass insulation. We could get the Big 3 back on track if we outlaw the internal combustion engine.
This is legislated obsolescence at work, and it’s one way governments can help keep the consumer machine in motion.
