Friday, January 18, 2008

Economic ups and downs

Tibor R. Machan

Those who study a country’s economic conditions, mostly macro-economists, track general trends--is inflation or unemployment, how about productivity, comparative strength of the currency, etc., and so forth. But the basics of all these are mostly local matters, all about what happens to you, me, our neighbors, all about what we decide to do with our income and other liquid assets.

At times I myself feel very much inclined to go shopping for stuff I would like, to replace some old things with newer ones, to take advantage of some innovative items I became aware of, or to simply stock up on things I like a lot, like novels to read, food to eat, and so on. Now and then I may go overboard with all the buying, get some big items as when I recently bought one of those mini-hot tubs I have been dreaming about to relax my aching back or a VCR to DVD converter to preserve some recordings for the future. And it was Christmas recently and I may have overdone it with gifts for my children and myself.

After I do some of this over the top shopping for a while I tend to get a scared and tighten my belt a bit, maybe even a lot. Instead of eating out I’ll just cook up something at home for several days; instead of taking trips to see friends up and down the coast of California, I decide to stick to those novels I bought and read and read and just read some more. And no more purchases of big items, nor home improvements for a while, certainly no new shoes or clothing. In short, I am inclined on such occasions to get out of the market except for services and goods that I need on a regular basis--but even these I may cut back so as to recover economically!

When last summer a large chunk of cash was stolen from me in Europe, as well as quite a lot of stuff I had carried with me because I was going to attend a wedding and bought gifts to bring home, I did experience some panic and stopped buying. I did replace the gifts but waiting a while before I got a new suit (when I was invited to another wedding). But to make the replacements less of a burden, I gave up other stuff. But I also went on a search for new sources of income--I lined up some speaking gigs and conferences I hadn’t planned to do beforehand. (This brought to mind the Laffer Curve! I assume if I were robbed weekly, I would just give up trying to recover.)

When I was robbed, I felt very nearly as I feel around April 15th every year. But that is a bit more predictable, within a certain amount of what will be extorted from me, so I can prepare for it better. But I usually react to having to come up with the funds (so as to avoid prison) by cutting back, saying no to purchases I’d normally make.

Now what if most people in the American, even the world, economy decide to cut back on their purchases? What if they all become terribly cautious about committing to spending? Millions of people stay away from the malls. Millions cut back on driving, going to movies, even visiting their dentist. What then? Well, I suspect this is when a recession is likely to commence. Add to this all the wasteful spending of the taxes extorted from us all, and the corresponding increases of our tax bills, hidden or overt, and this is likely to reduce economic activity and, therefore, income and savings.

To this, of course, politicians respond by promising to perform magic. They talk of stimulus packages--but where are the resources support to come from? Usually from printing more money, going into more government debt, or robbing Peter to make things a bit easier for a while for Paul. But, of course, one cannot get blood out of a turnip and none of this makes up for the reduced economic activity, the pause in consumption, and so forth.

Politicians have no bona fide magic--they only pretend to have it. So they will wave their hands about uselessly, maybe fooling a bunch of people with schemes of getting something from nothing. In the last analysis, however, the phenomenon of reduced economic activity is not something anyone can avoid. It happens. Most often it happens sporadically, not all at once across the country or the world, but at times the withdrawals tends to be nearly universal and then they will show up in the macro-economic statistics as somewhat sizable dips, a recession, even a depression at times. Trying to pretend that this cannot happen or can easily be avoided merely makes things worse.

Tuesday, January 15, 2008

Another Distortion at the Movies, etc.

Tibor R. Machan

American Rhapsody is a movie about a family that gets smuggled out of Hungary in the early 1960s and all the various complications this gives rise to. Since I went through this ordeal myself when I was 14, not with my family but several perfect strangers and a paid guide, I thought I’d check out the movie.

Expecting to see something familiar I’d witness, instead a very distorted picture of the escape emerged right from the start. And I have met up with this distortion before, when in 1981 TIME magazine carried a lengthy story about what TIME called flesh peddlers, the who people hired out their skills of leading people across the dangerous Iron Curtain. Just as TIME did, so American Rhapsody depicted the people smugglers not as heroes, not as folks doing an important piece of work for which hundreds of refugees would forever be grateful. No. Both TIME and American Rhapsody depicted the smugglers as rapacious, greedy, heartless brutes who had no concern for their clients at all, especially not the young children who accompanied them.

My experience was completely different. From the start, when my guide came to our apartment in Budapest and introduced himself to my mother and me, he was not only competent but very helpful. First he established his credentials so that we’d be at ease about the possibility that he might be some government agent setting a trap. This consisted of showing my mother letters I had written to my father, already in the West, ones only someone who had the trust of my father could have on him. Sure enough, this served its purpose--we relaxed and continued our preparations without nagging suspicions that very naturally infest such transactions.

I was allowed a day by the guide and my mother to decide whether this is something I wanted to undertake. It wasn’t a journey without serious risks, mind you. Several people we knew had tried to escape and were caught by vigilant border guards and immediately incarcerated and later sent to labor camps. (You see the communists were serious about the idea, one that attracts some Western communitarians, like the highly respected Canadian philosopher Charles Taylor, that each of us belongs to our societies!)

Of course, I decided to make the trip--for me it was more of an adventure than a hazardous escape and I had always dreamt about coming West. (Young people probably do not fully appreciate the dangers of such undertakings so for them they tend to be exciting adventures, mostly.) My guide then helped me to get ready by instructing me to send my bicycle to the city, Gyor, where we would disembark from our bus and begin in earnest the more complicated portion of the trip during the night, on our bikes, sleeping during the day in hey stacks on the way toward the border, after which we would have to walk.

All of us, the four adults and I, were provided with phony documents that would at least temporarily fend of authorities who might ask what we are doing wandering about near the Austro-Hungarian border. Then we started our 20 miles or so walk, mostly at the edge of freshly tilled farmland. Our feet took a violent beating from this--I eventually had to toss all the stuff I brought along and even go barefoot for good spells.

All along our heartless flesh peddler gave us all the help he could, kept reminding us what reward lies ahead, once we crossed into Austria and reached the American sector there. At the border he skillfully cut the barbwires and made sure that we would not trip the hairline wires wrapped around it. We were also carefully led though the 25 feet soft dirt just before the barbwires since it was booby trapped and we would have been blown to smithereens without his guidance.

Once we successfully crossed into Austria, we still had some 10 kilometers to walk to reach the railway station where we were to catch the train to Vienna. And after some hassle we did, only to find the train filled with Russian soldiers. Fortunately they were all drunk and our strategy of going through the compartments talking loudly in German turned out the be quite superfluous.

But I have told this story elsewhere already--my memoir The Man Without A Hobby (2006). The only reason I tell it again here is to show how this supposedly rapacious, heartless smuggler was, in fact, a completely decent, as well as highly competent, individual whom Hollywood and TIME really should have represented more honestly.