Economics the Hard Way

By David Glenn Cox

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My father used to lament the poor mathematical performance of his

children, “They struggle to get a C in math, yet they always know to

the penny how much allowance they are due.” It was true enough and goes

straight to the heart of the problem with numbers. We have a

fundamental disconnect with the numbers that don’t affect us directly.

The cheering crowd on the National Mall Tuesday, estimated to be one

million plus, was truly an amazing spectacle because of our emotional


But show us a huge jar filled with a million

jellybeans and our eyes glaze over. We have no emotional attachment to

jellybeans. If we were threatened at gunpoint to eat all of those

jellybeans, our minds would whiz like a super computer estimating our

chance of survival, devouring all the beans before a diabetic coma

caught up with us.

One million joyous Americans celebrating a

flag-waving spectacle is heart warming, yet each of those flag wavers

represents one American who has lost their job in just the last sixty

days. If you go back to August, the numbers of unemployed since then

would be twice the number of those on the Mall Tuesday. The number of

homes foreclosed on in 2008 would be one and a half times the number of

Americans on the Mall Tuesday.

Economics is a theoretical

science; it is like a football game where the statistics of each team

are modeled and then a winner is determined by probabilities. No

scrimmage or huddles, just statistics, theories and speculation. I have

been accused of being a poor economist and I take that as a compliment

because so many good economists are clueless, not to the value of the

numbers but about what those numbers mean. They count jellybeans

without counting the value of the people and their suffering.


models are as follows: 1.4 million homes foreclosed on in 2008 with an

average of four people in each house equals a crowd on the Mall almost

six times the size of the crowd Tuesday. Half of that number would be

schoolchildren and here’s where my math skills fail me. Of the married

couples that lose their homes, how many will lose their marriages at

the same time? Where are these children legally entitled to attend

school when their parents lose their address? These questions don’t

apply in jellybean modeling.

A good economist is a numbers

cruncher, totaling categories to arrive at statistics which are used to

generate models which explain almost everything, except perhaps where

do those 5.6 million people go. Where will they sleep tonight? Our

federal government has passed out, to the banks, the equivalent of 35

million dollars for each person on the Mall Tuesday and yet the number

of mortgages saved is less than the number of people on the podium with

the new President.

My poor economic training was due, in part,

to my upbringing as both of my parents were born in the teeth of the

last great depression. One was raised in the inner city, the other was

raised in a small industrial town. They experienced the depression

through evictions and missed meals, cold mornings and scrounging for

coal along the railroad track, of cheating the iceman and picking up

money working for bootleggers. In our current economic debate I have

heard repeatedly that the New Deal actually made the depression worse.

They back this theory up with their trusty six gun of statistics.


have only the fall-back position based on the experience of people who

were in food riots before the New Deal, and were not in any more of

them after its implementation. My grandfather fought his entire adult

life for the right to join a union. He was beaten and he was jailed on

more than one occasion, and after the New Deal he was the union steward

in his plant. He retired on a union pension and Social Security, both

of which he did not have before the New Deal.

My mother’s first

taste of watermelon came from a garbage can. Where do the trained

economists chart that statistic, hungry children eating from garbage

cans? They don’t, because they hold no emotional attachment to the

numbers; they merely count jellybeans and spout theories. Adam Smith

and his “Wealth of Nations,” written in the leading colonial power over

two centuries ago, wrote of ethics and the higher aspirations of man

while England ruled one third of the world as a hereditary empire.

Smith’s rights of man could be condensed down to the rights of wealthy


But to name any economist is to have another thrown

in your face, like Keynes, Friedman, or even the ridiculous Ludwig von

Mises, who espoused individualism over the wellbeing of city, state or

national interests. Individualism uber alles, or I got mine so screw

you. Defying centuries of human evolution and returning to the days of

whichever monkey got to the bananas first, he believed that was the

only monkey who deserved to eat. These economists go out of their way

to deal in the theoretical and never ever postulate negative

consequences to their own theories. Of course they believe that their

theories have no negative consequences; they speak instead of economic

dislocation or short-term economic distress.

My training is in

history, and history isn’t detachable from humanity. It is sifting

through the ashes and the wreckage of human folly and crackpot

theories. So, as I look at the evaluation of the New Deal, I ask

myself, “How would Plato consider this problem?” First, nothing was

being done to help people’s suffering; then something was done to help

people’s suffering. Was it a success even if it had many failings? The

Socratic method would invariably answer yes. It would be better to try

and fail than to do nothing and then congratulate yourself for being so


It is ironic that in ancient times rulers dealt in

absolutes and not in the theoretical. Pharaoh stored grain against

famine because it was his duty to do so. Caesar passed out bread and

coin to the poor because famine brought riots and riots brought fire,

fire that would exceed ten times the cost of the bread and coin. Today,

economists would calculate the least amount of bread and coin necessary

against the cost of fire and ruin. But all economic theories are true

and all are false. While there is plenty, they are true; when there is

not, they are all false.

Any system that fails to supply the

most wealth into the most hands is a failed system. History proves it

again and again and that is a fact and not a theory. So as I dabble in

human economics, I count not the empty houses but the people made empty

by these theories. Theories that fail by leaving out the most important

component in economics, the wellbeing of the people. This singular

failure is the root cause of most of the world’s misery, of war,

rebellion and revolution.

It has fed the guillotine, the gallows, and the pike on Tower Hill. That’s learning economics the hard way.

Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.

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