David McElroy

Early in my college years, I’d never had a credit card. I’d never had a full-time job and I’d also never needed credit. But I was walking through a Sears store at University Mall in Tuscaloosa one day when an attractive girl stopped me to talk. It turned out she was working for Sears, getting people to apply for credit cards.

The pitch was simple. There was some kind of gift — of marginal value, I’m sure — that she would give me if I’d just fill out the application. Plus, she said, she would make some money if I just applied. I explained to her that I wasn’t working and didn’t have any income, so I obviously wasn’t who they wanted. But she said it would help her, so I relented. I’d get a free gift — and how many college boys find it easy to say, “no,” to pretty college girls?

I forgot all about it, but one day before long I received a shiny new Sears credit card in the mail with my name on it. The credit limit was $350, if I remember correctly. What did I do? Did I tuck the card away to use in case I really needed something? Did I hold onto it to use a little here and there to build credit by paying the bill responsibly? No way. I went out that very moment and bought a VCR that I couldn’t afford, maxing out the card in the process.

I spent the next five years or so paying that VCR off, making the minimum payment most of the time and probably paying three times what it was worth.

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A helicopter pilot was flying outside of Seattle on a very foggy day and got confused about where he was. As he approached an office building, the co-pilot held up a sign for the people in the office building to see, which read, “Where are we?”

The people in the office building grabbed a piece of paper and wrote, “In a helicopter.” When the pilot saw the note, he immediately navigated over to a landing pad nearby. The co-pilot asked, “How did you know where you were based on their response?”

The pilot said, “When I saw that the message was accurate but useless, I knew we were at Microsoft.”

It’s an old joke, but it reminds me of modern reporting about economics. I’ve always known that economics was too complex to get right on television, but there was a day when print reporters could be expected to get the basics right. (The example in the graphic above makes it clear that it hasn’t always been the case, though.) It’s gotten to the point that the things I read in most stories dealing with economic issues are accurate in the technical sense, but provide so little context that they’re useless.

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We hear it all the time now from mainstream economists. No one could have predicted the economic crisis. No one could have predicted that the various “stimulus” programs would fail. And no one could have predicted that all the fake money the Fed has pumped out wouldn’t jump-start the economy.

There’s only one problem with that. Economists of the Austrian school predicted all of the things that the neo-Keynesians now say weren’t predictable. So why is it we aren’t turning to the Austrians for guidance about how to get out of the mess the Keynesians have created?

Jeffery Tucker has a fantastic article today giving specific examples of things that Austrian economists have said in the past few years. I highly recommend you read it and then think about why politicians and bureaucrats keep following the idiots who have been wrong over and over so far.