P. J. O'Rourke, of all people, has a quote that has gotten me thinking.

"There is a simple rule here, a rule of legislation, a rule of business, a rule of life: beyond a certain point, complexity is fraud. You can apply that rule to left-wing social programs, but you can also apply that rule to credit derivatives, hedge funds, all the rest of it."

Does this contain some truth, in the areas that this list is most interested in? Or does it reflect the suspicion people have for things they can't understand?

Gordon Haave writes:

I've held this view for a long time about the Fed and most economic matters. The basics are easy, they are then made more complex primarily so that people don't understand them.

Another good example of this, by the way, is trade policy/stagnant real wages. Why are real wages stagnant? Well, NAFTA and trade policy. If you increase the supply of labor, you decrease the market clearing price. It's simple stuff. Very simple. Econ 101.

However, if the people understood it that clearly they would revolt against it, which is why it is presented as being complex, when it isn't.

That is not to say that I am anti-free trade per se, but the average american would be if he understood the short to medium run implications.





Speak your mind

2 Comments so far

  1. Ed on August 14, 2015 5:27 pm

    Our economy “needs” complexity because “we” have not yet come to terms with the fact that most people have no ability to integrate into the economy in a way that is authentically productive. Complexity creates all of the fake work that keeps the 70% with nothing real to do busy and feeling important. Most don’t have th mentality to be “free” there is a need for most to be a tool or useful, so it is created via complexity

  2. Jackie Sea on August 20, 2015 2:36 pm

    Qualifiers as a substitute for real numbers are far easier to manipulate to perpetuate the lie. Graphs and real numbers can also be manipulated, but not as easily, and can more easily be disproven.


Resources & Links