Cato has a perfect illustration of the difference between being pro-business and being pro-big-business. And it’s an excellent primer on one of the many many anchors on our economy.

The link describes Governor Granholm’s failure to get the Michigan economy moving, Her plan, such as it was, was the plan that all politicos embrace when it comes to stimulating the economy. She created a river of sweetheart deals for politically powerful businesses — tax breaks, subsidies, regulatory breaks. And it has failed completely.

This is not unusual, it’s normal. The approach of bribing big businesses has met with failure after failure. These efforts create short-term jobs, but long-term catastrophe. Once the incentives dry up, the businesses disappear. Even worse, by giving certain businesses an unfair market advantage, other businesses — the unexpected businesses whose creation the economy depends on — are discouraged from ever appearing. The have to compete on an unlevel playing field.

This never deters politicians from taking the bribery approach, of course. On the contrary, they love this way of “stimulating the economy”. They get to hob-nob and take political contributions from powerful industries. They get to claim credit for anything good that happens and cut ribbons on things. And they get the rush of power that comes with every business decision having to go through their office.

It is, in the end, a perfect illustration of Bastiat’s “what is seen and what is unseen”. Politicians love what is seen — some heavily-subsidized industry opening a factory they can claim credit for. Most of them could give a rat’s backside about what is unseen — the businesses the might have been creating disappearing.

Reason did an amazing series earlier this year on how to save Cleveland that perfectly illustrated how economies should be built. Instead of sweetheart deals, you create an environment with reasonable taxes and simple regulations that encourages all business to succeed. Hong Kong rode this model to be an economic powerhouse with no natural resources. But it seems beyond the ken of our political class.

I’ve been mulling a long post on why I think Keynesianism — which is what both Republicans and Democrats are pushing these days — is garbage. But there’s one aspect of it that’s reared its ugly head lately that needs to be stomped on ASAP.

One of the things the Keynesians used to think was that it was impossible to have both high inflation and high unemployment. In fact, they claimed there was a mathematical relationship between the two. From the 1960’s through then 1970’s, our government deliberately inflated its currency because this supposedly stimulated economic growth. The theory was that by destroying people’s savings and investments, you forced them to spend money (I’m explaining in much more invective terms than they would).

It turned out that they had things backward — again, social scientists unable to distinguish correlation from causation. High economic growth can cause inflation, which is why the fed tightens the money supply when things are going well. And deflating the currency can make an economic crisis worse — as it did during the Great Depression. But inflating the currency has, at best, a minor effect on the economy.

The thing is, this is not empty-headed theory I’m talking about there. The supposed inflation-employment informed our inflationary policies for decades before crashing into reality in the late 1970’s, when he both high inflation and high unemployment. The inflation enthusiasts still have not explained that; they prefer to ignore it.

Cato has, the last week, destroyed this theory in two posts that clearly show the inflation-unemployment relation does not exist. But Keynsianism — or consumerism — is increasingly becoming a religion. So expect this hard data to be ignored.

Why am I a libertarian? This is why:

This is not unusual, this is normal. Without government, bad ideas tend to eat themselves. With government, they get the power of politics behind them and become almost impossible to reverse or even stop.

Hard to believe it’s been ten years since one of most contentious Supreme Court decisions in recent memory.

There are two issues wrapped up in Bush v. Gore, of course. The first concerns the election itself. That’s not a subject I really feel like re-opening, given all the Michael Moore-esque bullshit out there. I don’t think either side covered themselves with glory but there was something particularly repellent about the Gore team’s tactics — loudly proclaiming themselves as the defenders of democracy while trying just as many sneaky tricks as the Bush team did. Say what you about Republicans, at least they don’t pretend to be noble.

Well, at least they didn’t used to.

The other issue is the SCOTUS decision itself, of course. It’s the ten year anniversary, so let the bullshit begin:

Momentous Supreme Court cases tend to move quickly into the slipstream of the Court’s history. In the first ten years after Brown v. Board of Education, the 1954 decision that ended the doctrine of separate but equal in public education, the Justices cited the case more than twenty-five times. In the ten years after Roe v. Wade, the abortion-rights decision of 1973, there were more than sixty-five references to that landmark. This month marks ten years since the Court, by a vote of five-to-four, terminated the election of 2000 and delivered the Presidency to George W. Bush. Over that decade, the Justices have provided a verdict of sorts on Bush v. Gore by the number of times they have cited it: zero.

Toobin — that’s the writer of this piece of crap — goes on to argue that this means that Bush v. Gore was bad precedent. That’s as maybe but this argument doesn’t support his conclusion. SCOTUS decision on abortion and segregation affected people’s everyday lives. There were therefore hosts of cases that needed Brown or Roe clarified and applied. The only thing that would need Bush v. Gore as a precedent would be another national election. Razor-close national elections are rare. In fact, the last one I can remember that might have gone to SCOTUS was Coleman v. Franken. Coleman abandoned that case before it got that far.

Toobin is also full of crap because Bush vs. Gore has been cited by lower courts, including the 9th Circus.

The appropriate way to analyze the legal impact of Bush v. Gore would be to see how many cases on federal or state election law have come before the Court and how many could have cited Bush v. Gore but didn’t? Toobin doesn’t answer that because he’s not interested in the impact of Bush v. Gore; he’s interested in slamming it.

It gets better:

The Supreme Court stepped into the case even though the Florida Supreme Court had been interpreting Florida law; the majority found a violation of the rights of George W. Bush, a white man, to equal protection when these same Justices were becoming ever more stingy in finding violations of the rights of African-Americans; and the Court stopped the recount even before it was completed, and before the Florida courts had a chance to iron out any problems—a classic example of judicial activism, not judicial restraint, by the majority.

The first part of this is vile poppycock. The Supreme Court applied the equal protection clause not because George W. Bush’s rights were violated. They applied it — appropriately in my view — because Florida did not have a uniform standard for counting hanging chads and other uncounted votes (that tends to happen when you’re making up the rules as you go). This set up a situation where a vote that was not counted in one county could be counted in another. It’s as if one county closed its polling office early (or maybe an entire panhandle). Indeed, it wasn’t clear that some counties would do the recounts at all. (This being of course what the Noble and Wise Gore team wanted — so that recounts would go on only in Democrat-controlled counties).

Moreover, that decision was 7-2, not 5-4. Frankly, I don’t know what Ginsberg and Stevens were smoking that day since it should have been 9-0.

The controversial 5-4 decision was to stop the recount completely. Now that one was a debatable decision. I think the Florida State Supreme Court was wrong to order the recount. The best way to hold an election is to set the rules in advance, follow those rules and then end it. The Florida Court was basically making the rules up as it went and along highly partisan lines.

However, as Toobin points out — correctly, even — this was judicial activism. The Constitution is quite clear that each state sets its own election rules — fairly or unfairly. Even if the Florida Court was screwing the law, one could argue that it was their law to screw.

So it’s perfectly reasonable to argue that the Court should have just insisted on a uniform recount standard and let the recount proceed. I might disagree with that, but it’s a legitimate point of view. But to argue that the Court should have let the unequal standards slide is ridiculous. And to argue that the Court made the decision because Bush was white is obscene.