Biloxxxi's Woodshed

“It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”
-Frederic Bastiat

Political bumper stickers bug the shit out of me. Democrat, Republican, Al Qaeda, it doesn’t matter, they’re all stupid. Political bumper stickers are only relevant for about 8 months. After that, either your guy was elected and you’re happy and your paint job is ruined, or you’re a douche because you backed a losing horse and your paint job is ruined. Either way your paint job is ruined. This past election cycle, we got an extra added bonus. As a result of the metric shit-ton* of Obama bumper stickers, our economy took a walk off the plank. I don’t blame Captain Obama for this, I blame the hoardes of followers that purchased the God-forsaken “Yes We Can” bumper stickers and the 27 people that bought the Ron Paul stickers (Nobody bought Mcain/Palin bumper stickers because your car would get keyed). Just go with me on this. You might learn something.

I was seriously worried this was Arabic at first. Turns out, it's Hebrew for "recession."

There’s a story you probably read back in economics class called The Parable of the Broken Window. Just in case your mother dropped you when you were little, it goes a little something like this:

A shopkeeper, let’s say a baker, has a store in a small town. His son throws a stone and breaks a window in the store. The baker is quite upset over this and calls the window maker (glazier) to repair it. The glazier arrives and informs the baker that it will cost $10 to repair the window. The baker reluctantly agrees. As the glazier repairs the window, the townspeople stand around and declare, “Every man must make a living. What would the glazier do if no windows were ever broken?” The baker pays the man the $10, the Glazier pats the boy on the head, and everyone goes on about their business.

For its one paragraph length, this story contains a wealth of information. A pretty complete working knowledge of our economy can be gleaned from an understanding of this parable.

First off, the idea that society as a whole benefits as a whole from the window being broken is false. (Stimulus plan, anyone?) Sure, the glazier would not have received payment for fixing the broken window, but had the window not been broken, the baker could have spent the money on groceries or new shoes or something like that.

But what about the window maker? Sure, he benefits immediately and directly from the window being broken, but it comes at the expense of the baker. If the window remains unbroken, perhaps the baker uses the $10 to buy a new pair of shoes from the cobbler. The cobbler, in turn, buys something from the blacksmith. Then the blacksmith, who just happens to be building a new home, uses the money to help pay the glazier for the windows in his new home.

See the difference? In the second example, society benefitted as a whole, because the production came at no one’s expense. Everyone gained something they wanted. In the first example, there was no net benefit to society, because the baker had to give up his new pair of shoes to fix the broken window. Essentially, it comes down to fixing something that’s broken artificially versus buying something new. This story is meant to represent a tiny transaction, but it happens millions of times a day in a million different combinations. Take a minute to wrap your noggin around this before I use it to explain how Obama bumper stickers cause me to have to keep this God-forsaken job.

Ready? Ok, here we go…

Let’s say that in the heat of the moment, you got all caught up in the Obama movement and you went out and bought an Obama/Biden ’08 bumper sticker and smacked that puppy on the back bumper of your 2001 Honda Accord. You rode around, proudly displaying your love for Barack N’ Roll (possibly the title of U2′s forthcoming album), until 2010 when it came time to purchase a new vehicle. You kept your Honda in immaculate condition and you should be able to garner top dollar for it. Except, no one wants to buy a car with a bumper sticker on the back, at least not a nice one. So you go out back to remove it, and a chunk of paint comes off with it. Great, now you’ve either gotta knock something off the selling price or you send it to the Body Shop to be repainted.

There are many different ways this story could go from here, but keep in mind that it is representative of millions of different transactions, and the overwhelming likelihood is that the money will get spent on fixing the car. So first off, we have to decide who benefits monetarily from this scenario. (The fact that Obama was elected is irrelevant to this story.) Obviously whoever made and sold the bumper stickers will benefit directly from so many sticker purchases. Then you’ve got the body shop people who get paid for repairing the vehicles. Those are the beneficiaries. Now, we have to see at who’s expense this profit comes at and whether it’s a net loss to society as a whole.

It’s pretty plain to see that the body shop and the sticker maker’s profit comes at the expense of the vehicle owner. Having a bumper repainted costs roughly $500 and a bumper sticker costs maybe $4. $500 is typically the deductible on a car insurance plan, so that portion is getting paid to the body shop out of the car owner’s pocket. His window just got shattered. If there was no bumper sticker damage, the body shop would get paid through car wrecks and normal wear and tear on down the line anyway. However, the car owner has to forgo any number of things to pay for this damage; groceries, dining out, new clothes, etc. All things that would stimulate the economy in a much broader spectrum.

The bumper sticker maker is a slightly different story. Although he’s benefited greatly from this infusion of cash, those that make bumper stickers are usually pretty diversified. A manufacturer simply puts a logo on a sticker. They can also put this logo on a million different things that don’t destroy property. Not particularly difficult to switch to something else when bumper stickers aren’t lucrative. Also, there’s no bumper sticker store at the mall. They’re usually just something you buy off a website or pick up at a newsstand. If bumper stickers aren’t profitable, you just switch to something else and you’re out maybe $20.

Does everyone see the correlation between the broken window parable and the bumper sticker parable? The broken window parable is pretty cut and dried. Something gets destroyed, one person pays, the other person gets paid. The Obama bumper sticker parable is slightly different. An item is created that makes one person money, but in the long run, it destroys another person’s property which has to be repaired. That benefits one person at the expense of another at a greater rate than the original gain. Final score: net drain on society.

Honestly, Obama bumper stickers probably haven’t contributed to the recession all that much, but they have reduced the value of our GDP thorugh some miniscule increment. I enjoy looking at things from this point of view. The next time you watch a Dirty Harry or Die Hard movie, try to think about the collateral damage in terms of it’s net effect on society as a whole in monetary terms. It’ll either give you a headache or you’ll end up with with a warped mind like mine.

*My favorite thing about the term ‘metric shit-ton’ is that it combines both the Metric and Standard systems of measurement, and that, my dear friends, is totally tits.

This entry was posted on Wednesday, September 16th, 2009 at 11:57 am and is filed under Treatises on Life. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.