ABC Index ... Index Economists

Crack Cocaine Economics

Euphoric stimulus packages that do not last that lead to worse depressing conditions.

When Herbert Hoover assessed the economic downturn after the 1929 stock market crash, he wanted to minimize people's worry by not using  the word "Panic," the traditional word for economic chaos. Instead, Hoover called the downturn a "depression." The same historical judgement will develop on the economic phrase: "stimulus."

When a heart stops beating, a stimulus injected into the heart may restart it. However, if a person chronically stimulates instead of feeding his body, his heart will  permanently stop as his health declines. This is one of the reasons that chronic users of chemical stimulants (speed, meth, crack, cocaine and uppers) appear to have bulimia with rotten teeth. Uppers or speed were often used by housewives to reduce hunger so they would lose weight. Overdone, a stimulus to one's physical or economic body is an appointment for embalming or revolution.

Anytime someone receives monies that they did not earn--including pity money--economic inflation occurs. At a certain point, a chronically ill economic body cannot rebound from bad money policies. Collapse and chaos are inevitable.

The question for politicians and economists enamoured with "stimulus" is whether their stimulus package is restarting a stopped heart or feeding a crack habit. Said another way, is the stimulus good or bad? If the economic body requires repeated deficit-based stimuli, it is an economic crackhead addicted to artificial stimulants rather than endogenous health. Consider the trajectory of the following stimuli legislated by habitual politicians.

Examples 2007-2010

  1. Troubled Assets Recovery Program (TARP): To keep the self-inflicted damages from killing the financial system, billions were given or lent to failing companies. Given that the companies did not change their ways, stimulating these companies with cash influsion was economic crack.
  2. Clunker Car program: Prices for used cars shot up as cars traded in were destroyed to prevent being sold for the road. After the program ended, auto sales dropped precipitously by upwards of 50%. Bad stimulus program.
  3. Housing tax credit for first time buyers: Given the falling house prices, the $8000 tax credit would have shown up as a lower home cost if the habitual politicians had done nothing. As is, they stimulated at temporary inflationary bubble after which home sales dropped by amounts not seen for half a century. Definitely cocaine economics.
  4. Economic stimulus, 2009: It was estimated that China received 75% of the stimulus money with little stimulation of the US  economy except for middlemen buying foreign goods for US consumption. Is it a good use of deficit spending to stimulate the robust economy of a military adversary?
  5. Wage tax holiday: This proposed economic stimulus (Fall, 2010, election season) will only make things worse. First of all, businesses will have to spend money running a separate payroll system. Secondly, people are not going to spend the money because the fact of cancelling wage withholdings indicates that politicians don't believe the economy will rebound on its own. Only a fool would not save the extra money in their paycheck.
  6. Education stimulus: Pell grants stimulate "for profit" colleges which turn out low quality graduates that posses a de facto college GED and big debts. These programs are examples of crack cocaine economics.
  7. Disasters: Habitual Politicians are disaster basturds .  The only viable solution to disasters is a quarantine.
    1. 2007, Greece Fires: When the Greek politicians responded to the disasterous fires by giving people money, they were fueling the fires of economic inflation and collapse. They should have implemented the Whole Plan of the Manheaven Commssion.
    2. British Petrophilia Gulf Oil Disaster:  Paying people to do nothing after a disaster worsens the first disaster with an economic disaster of inflation and unemployment.
    3. VA Tech and 911: Payouts to survivors are examples of crack cocaine economics. Pity money is an example of people not caring carefully.
  8. Lotteries are examples of economic crackheads: A person who had been in a productive, needed job suddenly has a windfall of money with which to stimulate non-essential goods and services. As Las Vegas shows with its collapsed economy and 20%-plus unemployment, a city, a state and a nation cannot gamble its way to prosperity. A lottery winner is a beneficiary of an individual stimulus plan which does not consist of good money.
  9. Monetary Colonialism: After World War II, the US had not only the largest economy but the only intact economy. With this economic muscle, we initially helped other nations until the US habitual politicians started to export dollars instead of adjusting our economy to new economic realities. By exporting dollars to purchase foreign products, the US initiated an on-going domestic stimulus for cheap foreign goods which amounted to monetary colonialism. Like all cancerous stimuli, the day of reckoning is arriving as foreigners will not accept cheap dollars for cheap goods. Unfortunately for US consumers, there were a lot of births based on the artificially inflated economy from monetary colonialism which are now showing up jobless citizens.

When politicians make good policies then the polity in the polis will be polite without police.

Like all entities in existence, a stimulus can be quantified in time. Does it create time? For how long? If it is a saltwater policy which temporarily quells the thirst for solutions to one's problems, then one should not drink the saltwater solution. In other words, if the stimulus is an example of Kodak morality then the benefits are short-lived. Habitual politicians are guilty of Kodak morality and crack cocaine economics when they use an economic stimulus to bump up the economy before the next election.

In reviewing the above list, recognize that they accelerate the existential meltdown by misdirecting human time away from producing the basics of life. In 2010, habitual athletes bargained for higher million-dollar wage packages while teachers, policemen and firemen were being laid off. The President of the United States has his speeches cut short by network TV while a habitual athlete buys an hour of TV time to explain why he wants to frolic in the sun.

A stimulus is either creative or cancerous, either good or bad, either living or lying. The latter contrast refers to how money--whether earned, borrowed or printed--either stimulates the cost of living or the cost of lying (the two parts of the cost of humanity). If politicians and people stimulate their wants and wastes instead of their needs, they should not be surprised at what they elect when they vote badly with their dollars.

The impact of how money is spent defines the quality of money. As is often said, we get the politicians that we vote into office. Likewise, we get policies that reflect our personal spending habits. If we are so dumb as to vote for players and gambling, we should not be surprised when the politicians wreck the economy with more stimulation of sports and lotteries. We get the government and policies we deserved.


  1. The lottery is a tax on those who don't know math while the stock market is a tax on a middle-class that ignores math.
  2. Do grown jobs or infrastructure stimuli or grow the economy programs distinguishes between cost of living and cost of lying activities? No, thus, promised hope of renewal is smashed by feeding the elephant in the room which is an unending stampede of rising inflation and joblessness. The elephant? Global Dying.
  3. "We cannot raise taxes at this time when the economy is suffering" is the same as "We cannot withhold the crack at this time when the addict is suffering." Kicking the can down the road on economic reform is as bad as giving a crack addict larger doses to maintain his sunny, pleasant disposition.

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