The idea that the purpose of economics is to study the problem of production or "productionism" rests on the observation that man must produce in order to survive. It recognizes that man's desire for wealth is unlimited but that he must produce that wealth. Fundamentally, this represents a recognition of reality. On the other hand, the idea of consumptionism is a total reversal. It starts with the idea that the "goods are here" and we must figure out how to "allocate" or "consume" them.In other words, if one starts with reality as his primary frame of reference, he will soon grasp that he must produce in order to survive. However, if one starts with his own consciousness as his primary frame of reference, his focus will be on his own inner desire or wish to consume the wealth that seems to somehow exist, or perhaps, on optimal ways to allocate this magical bounty to others.
The concept of creating paper money out of thin air to pay debt is a fantastic example of this dichotomy. It is predicated on the idea that one can reverse engineer reality, i.e., create actual wealth by simulating a non-essential byproduct of the wealth creation process - the appearance of large sums of paper dollars. Kris Kayce via Not PC points out a staggering fact regarding the European bailout:
It still startles us how our Keynesian friends can’t grasp how illogical it is to just print money. Look at the number again, it’s the equivalent of A$1.1 trillion or greater than the entire yearly output of the Australian economy.With that in mind, consider this New York Times article which discusses the behind the scenes interplay between Washington and the Europeans last weekend. According to the report:
Think of it this way. It will take the European Central Bank about, ooh, a tenth of a second to create the billions of Euros needed. Yet it will take 10.9 million Australians working an average of 35 hours per week for 52 weeks to produce the same output.
American officials became worried about the European response as early as February, a senior administration official in Washington said on Monday, when European leaders repeatedly stated that the Greece problem was well contained. They believed that mere expressions of support would be enough to calm the markets — and that they did not need to put in real commitments of emergency funds.Right away, note the primacy of consciousness orientation of these policy makers as they discuss "expressions of support" rather than actual steps to control runaway deficits.
On the surface, this sounds reasonable. The Americans appear to be rejecting mere words and instead urging actual eradication of the "risk of default." How? Perhaps they demanded that Europe take steps to reign in massive budget deficits by cutting spending. Or, perhaps they demanded that the Europeans encourage the actual production of wealth by lowering taxes, repealing regulation, and lessening the stifling burden of welfare statism. So, what did the Americans really mean?
The Americans were less persuaded, telling their counterparts that they had to eradicate “the risk of default.” The Europeans debated this internally and, in the mind of one senior American official, who would not speak on the record, the Europeans “waited too long.”
“Had they acted sooner,” he said, “They might have gotten away with less.”
Yes, you read that right. The advice of the American government is not to "get its act together" in reality. It's advice is to "convince people that the government will get its act together" through the "overwhelming force" of psychological manipulation and the creation of phony money.
The United States officials began talking to their counterparts about an American concept: overwhelming force. “It’s all about psychology,” said the senior official. “You have to convince people that the government will get its act together.”
But it was not until Sunday, one official noted, that the meltdown spreading across Europe was regarded as “an existential threat.”
That's Obama's message - not "face reality" but "carry on with the charade"?! Carry on guaranteeing government bureaucrats cushy jobs, comfortable pensions, and whatever else it takes to stop them from rioting. Carry on spending more than you produce. All you have to do is get people to think everything is ok. In fact, according to this official, if they had implemented this charade sooner, they could have "gotten away with less" as if the sooner you implement a con, the less of a price reality will ultimately exact from you.
Then, like a drunk who considers hangovers to be the real problem rather than the consumption of alcohol, this brazen attempt to flout the nature of reality was only regarded to be an "existential threat" when the markets began melting down, not when they chose to spend trillions more than they have.
Finally, to conclude the farce, these courageous leaders emerged from days of rancorous debate, bruised and battered, but willing to make the "tough" call: they agreed to counterfeit a trillion dollars.
In case you were wondering, this particularly absurd species of primacy of consciousness has a name: Keynesian economics. Recall that Keynes argued that the long run effects of his policies did not matter because "in the long run, we will all be dead." Well, we are living in the long run, and it appears that the only one who is going to survive is Keynes.