Saturday, May 14, 2005

A Reader Corrects

Recently a reader reminded me that V.P. Al Gore did not directly claim to have invented the Internet, as I said. The reader referred me to a site that contained V.P. Gore’s actual comment, which was, “During my service in the United States Congress, I took the initiative in creating the Internet.” Somehow, the Senator’s name does not show up among the movers and shakers of Internet innovators.

And that about sums it up. No doubt Mr. Gore felt he could not be harmed if he obtained some of the Internet glory for himself as he campaigned for president. My comment was not meant to be political, but rather Congressional. That is, a Congressional campaigner from any political party might make a similar statement if he felt it would reflect some honor on himself (most politicians want to appear to be in favor of Mom, God, and apple pie. Nothing wrong with throwing in a dash of technological wizardry, too).

The most excellent Senator was a Congressperson, and it is they who often act late and inappropriately (add the Federal Reserve leaders in that mix). For instance, Congress levied a big tax on yachts, saying they were a big luxury and thus, their owners could pay a big tax. Congress felt it was the sole arbiter of luxury-ness and that wealthy people are small in number and could not vote against them in the next election.

As it turned out, wealthy people resented the tax and refused to buy yachts. Yacht makers suffered some, but their employees suffered most. So, as a result of Congressional interference, many yacht building laborers were put out of work. They were the little people, the ones who could least afford silliness in government circles. It is no business of Congress who has money and who does not. Had they realized that fact, there would have been no tax and no resulting unemployment.

No doubt Congress will remember this lesson for all of 20 days, then will enact a luxury tax on twelve inch candles because only the wealthy can afford them. Resulting unemployment due to decreasing demand for twelve inch candles and larger, will cause a howl among suddenly-unemployed workers.

On the subject of the Fed, I can safely state that I read every Federal Reserve report from 1914 to 1967. They were printed in chloroform, so it was a difficult task. (I had a research fellowship in economics at Case Western Reserve University in 1968.) One of the ideas I got from the research was that the Fed acted too heavily and too late nearly all the time. It was especially obvious as the country was coming out of the darkness of the Great Depression in 1937. At that time the Fed thought it saw inflation on the horizon, so it clamped down and brought about another dose of depression. The last two Fed chairmen seem to done better with their ministrations, so the Fed may yet redeem itself.

I have no such hope for Congress.

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