Cargo Cult US Policy

January 31, 2015

Melanesia includes island countries like Vanuatu, the Solomon Islands, Fiji, and Papua New Guinea. During World War II and other colonization eras, there developed what is called the Cargo Cult.

One main idea of the Cargo Cult was that it was the building of runways for airplanes which brought all the planes, which brought all the riches from the outside world. They believed that the cause of the planes coming was the existence of the landing strips.

From our perspective, we can see that they had cause and effect exactly backward. So, for example, during World War II, the strategic location of these islands caused the Allies to want defensive, and offensive, outposts there. To have these outposts required much equipment and supplies, and this need caused the building of the airstrips.

We can see that the need to deliver materiel is the cause, and the construction was the effect, where the Melanesians believed that the runways caused the planes to come. Though their perspective made them think this, they still were wrong about the cause and effect.

Today, many modern day, western analysts, in several fields, make similar mistakes about cause and effect. As many of these mistaken beliefs have economic consequences, the negative results can affect hundreds of millions of people.

Take for example, the Minimum Wage. On the one hand, we have the real wages that people earn, for performing various services, working in factories, and doing the myriad other chores needed in a modern society. On the other hand is the wealth within the economy, built up through investment and innovation.

Most people, especially Keynsians and other socialists, believe that consumption makes you rich. They believe that as people spend, they stimulate the expansion of the means to supply all the items being consumed. In their world, raising the Minimum Wage gives more money available to consume goods and services, making us all rich.

They ignore simple mental tests, such as, “What would happen if the Minimum Wage were raised to $100 per hour tomorrow?”

All but the lamest of minds would understand that this would collapse our Economy overnight. The reason is that it is NOT spending which makes us rich. It is NOT higher wages which creates wealth. Cause and effect are exactly opposite – Keynesianism/socialism is the modern society’s Cargo Cult.

The actual cause and effect are the other way around. If your Economy is richer, it will support higher wages. If your society is richer, it will support greater consumption. It is the production, and the savings/investment ahead of time, which has allowed average (and even poor) people today to live like the royalty of a couple hundred years ago.

Much of the reversal of cause and effect understanding is the result of political dogma. First comes the belief and then comes the backwards data to support the belief.

Climatic data collected and analyzed over short (100s of years), medium (1000s of years), and long (100,000s of years) time periods all show a relationship between temperature and atmospheric CO2. That relationship is that, as temperatures rise CO2 levels rise, and as temperatures fall CO2 levels go down. Temperatures go up and down, followed by CO2, and not the other way around. On the longest time frames, CO2 follows temperatures by 600-800 years.

The historical record shows that global temperatures have gone up and down, in long, medium, and short term oscillations, for a million years, without the aid of human influence. Ocean temperature ups and downs are well documented, if not completely understood.

The El Nino/Southern Oscillation (ENSO), the Pacific Decadal Oscillation, and the North Atlantic Oscillation (NAO) are among the oceanic patterns which affect global temperatures. This is well documented – it’s not a mystery.

And yet “modern” climate science clings to the Cargo Cult of CO2, which follows global temperature changes, being the cause of the rising temperatures. It clings to the temperature rise from the mid 70s until the late 90s as being a cause for hysteria, even though the rise is well within historical precedent – within natural variations.

The result of the climate Cargo Cult is that US government policy has been anti-energy for a couple of decades. Oil production is being attacked, coal production is being attacked, and natural gas production is being attacked, all because using these fossil fuels put CO2 into the atmosphere. A non CO2 causing energy source, nuclear, also continues to be under attack, further demonstrating that it is anti-energy dogma at work rather than “saving the planet.”

The Economic fallout from the various modern-day Cargo Cult activities in the US make all Americans more poor. Keynesian policies encouraging consumption rather than saving/investing hurt all Americans. Anti-energy policies of the climate establishment hurt all Americans.

The American middle class is being destroyed. Already poor Americans, the least able to defend themselves from these stupid policies, are being made destitute and absolutely dependent on government largess.

It is long past time to rid our country of the Cargo Cultists who, whether unwittingly or by design, are destroying our country.

Robert (Bob)  Shapiro is self-taught in Austrian Economics and has consulted briefly for the governments of Mexico, Greece, Portugal and Spain. He has traded Gold & Silver and their stocks since 1970. Bob Shapiro’s blog is

Spanish Conquistadores invaded the Inca Empire in 1528 to steal their silver and gold.