An Analogy

Whenever I see conservatives expressing alarm over budget deficits and falling currencies and insisting that our first priority should be to balance the budget and maintain currency value, I keep thinking of an analogy.

Imagine (and I know it seems far-fetched, but imagine) a society that has our technology in microscopes and bloodwork but for some reason never developed the germ theory of disease. People in this society discover that when people are sick, their white blood count goes up. Furthermore, the sicker people are, the higher their white count. And one sure sign a sick person is getting well is the white count returns to normal. What would the obvious conclusion from all this be? Well, obviously, elevated white counts make people sick! Disease should be treated by lowering the white blood count to normal.

So doctors and scientists would develop all sort of medicines to suppress white blood cell production. The first thing they would learn was that it took more of it than they expected because attempts to suppress white blood cell production meet with resistance. And no doubt these medicines would have unpleasant or even dangerous side effects. But no matter, the important thing is to suppress those dangerous white blood cells that are making people sick. And ultimately they would succeed. With much trial and error, they would come up with a treatment that got people's white blood cells back down to normal, no matter how sick they were.

And then an awkward little fact would come up. People undergoing such treatment always seemed to get sicker. But this would be brushed aside as secondary. So what if they keep getting sicker, that just shows how sick they really were. The important thing is that we got the white count back to normal, the most essential ingredient of good health.

And then someone would come up with an even more awkward fact. People whose white cells get brought down to normal seem to die more often and take longer to get well than untreated people. That would be really awkward. But in the absence of a theory to explain it, it would be brushed aside as secondary and unimportant. Obviously white blood cells are what is making people sick. Why else would white count so perfectly correlate with severity of illness?

More charitably, I might make the comparison with fever. Fever really is unpleasant to experience, and if it goes to high, it can be as harmful as the underlying infection. But ultimately, moderate fever helps fight disease, and fighting it only delays recovery. Perhaps this is the better analogy.

But either way, the difference is that we have a theory to explain why rising deficits and falling exchange rates are not the problem, but an essentially therapeutic response to the underlying pathology. And we have plenty of evidence that countries that allow deficits to rise and exchange rates to fall do better than countries that fight these trends. Heck, we even have an ideology that can explain these things as proper self-correcting mechanisms of the free market.

So why the urge to fight economic illness with fever reduction and white cell suppression?