Wealth creation vs. wealth destruction

Roger Kimball:

Boris Johnson, the redoubtable Mayor of London, cuts through the bickering fog of self-righteous protestation that characterizes so much political discourse today. The real debate, the Right Honorable Lord Mayor observes, is not between Labour spending versus Tory cuts-the "progressive" (Yanks read "Democratic") versus the "hard-hearted" (read: "Republican") approach to public expenditure. No, the real debate is between those who focus on disbursing and those who concentrate on creating wealth. What Mr. Johnson describes as a "small, sheep-like cough of protest" in his article in the London Telegraph actually contains more economic wisdom than 87 white papers issued by Washington or Whitehall, 789 columns emitted by Paul Krugman, or 7896 columns by Joseph Stiglitz. "This whole debate is back to front," Mr Johnson observes.

We are putting the cart before the horse. Every time you hear a politician stand forth and invite your good opinion by offering to "cut" this or "invest in" that, ask yourself the prior question: just how did the politicians come by this money? Who created it? And what are we doing to help them create more?

This is taxpayers' money, amigos. It was produced by the sweat upon the brow of the 23.6 million private-sector employees, and by the hundreds of thousands of British businesses - 80 per cent of them with five employees or fewer - that are struggling on in spite of the recession.

A breath of fresh air, what? There's more:

Instead of more delectable disputations about the exact size of the state, we need to change the focus of the argument. Of course there are important choices to be made and it is vital, in my view, that we spend on infrastructure investment (notably in London) rather than on consumption. But we are not dedicating anything like enough political energy and interest to the real issue: who the hell is now speaking up for the wealth creators of this country?

The Obama administration should prick up its ears. The Democrats in Congress are trying to figure out exactly whom and what they can tax in order to come up with $600 billion to pay for the Presidents efforts to transform all of American health care into wholly-owned government programs like Medicare and Medicaid. (Pause, please, to ponder that.) What they should be worried about, as Mr. Johnson notes, are strategies that make it easier to create wealth.

...

Sounds like an epiphany to me. It is one of those Eureka moments when some one refocuses the debate on the consequences of policy beyond the intentions of those making policy. I know Democrats don't want to make as big a mess as they are working on making, but they feel compelled forward by other priorities that work against the very objectives they are seeking. They forget such immutable facts as the law of supply and demand and seem surprise to find that huge increases in debt lead to higher interest rate. Raising taxes on millionaires makes for fewer millionaires. And so it goes.