Big Dogs Weblog

On Economics, He Knows Not What He Does

by Blake on Sep 7, 2009 at 09:45 Political

BHO, our “Beloved” Resident, has been tinkering with the economy, and like a child who doesn’t know when to step away from his finger-painting, has been producing mud, instead of something we might want to put on the refrigerator with magnets.

His biggest problem is total ignorance of life in general, and the lessons of the Great Depression in particular. That would be OK if only he had advisors who were steeped in real- world economics, but instead, he chose to surround himself with cronies who believe as he does, a dangerous thing if you are trying to run a country, especially a country in economic trouble.

Now, because he has been listening to the wrong people, and also because he chose to string this crisis along, so people would have their attention diverted, and he could (hopefully) push through pet causes while we were distracted, we could be looking at another Great Depression, one that reduces our capacity as a country to respond to the world’s needs.

This is not good, and only serves to point out the ineptness of this administration.

There are “troubling similarities” between the US President’s actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.

In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House’s plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.

telegraph.co.uk

Too true- but then one asks the question, “Is this intentional?” I mean, if you take Rahm Emanuel at his word, where he states to “Never waste a crisis”, you have to ask yourself if the “crisis” is being extended artificially merely to push through more of an agenda than the people would freely accept. If so, then this administration is deceptive at best, and treasonous at worst, allowing the people they are supposedly “governing” to suffer needlessly.

The paper, which recommends that the US return to a more laissez-faire economic system rather than intervening further in activity, has been endorsed by Nobel laureate James Buchanan, who said: “We have learned some things from comparable experiences of the 1930s’ Great Depression, perhaps enough to reduce the severity of the current contraction. But we have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work.”

telegraph.co.uk

Bingo! An economist who gets it- not some Krugman poseur economist wannabe, who just happened to get a prize for “showing up”- rather than for real world economic theory. Hussein’s administration, rather than listening to Soros and his ilk, (and yes, he is part of an ilk), should be listening to economists who know what they are talking about- that’s always a good start.

The policy responses to the debt bubble demonstrate crude political consideration rather than economic understanding. If excessive government indebtedness is a major source of the problem, why increase the government debt? Why encourage households to go yet further into debt?

The prognosis is catastrophic if projected government policies are not cut back. According to the White House’s own estimates, the federal budget deficit in 2009 will be $1.6 trillion, approximately 11.2pc of the overall economy, the highest on record since the end of the Second World War. In 2019, the national debt will represent 76.5pc of the US national economy, the highest proportion since just after the Second World War. In such circumstances, the international reserve status of the US dollar will not survive. As it fades, so interest rates on government securities will rise and the real burden of servicing the debt will increase. In such circumstances, the US economy will teeter on the edge of a black hole.

telegraph.co.uk

We are already there, and  falling fast- what this administration has done has not helped, but rather pushed, or as one of the Residents really great “advisors”, or Czars, Cass Sunstein, has said, describing his technique of “social engineering”- “nudged” us towards the precipice. 

Prosperity and full employment in the US will only be restored by a return to laissez-faire capitalism. Our study outlines a radical, but politically feasible, approach. Monetary policy should be expansionary. But, on the micro-economic side, tariffs and other trade barriers should be repealed unilaterally; a “Right-to-Work” Act should reduce the minimum wage and curtail the powers of unions; and business regulation should be reduced. Individual banks and their counterparties should not be bailed out, although the system should be protected by ensuring that failing banks are wound up in an orderly fashion – this is the only way to restore market discipline.

telegraph.co.uk

This administration should listen to these people- they actually make sense, rather than the “Looking Glass” theorists there are now. Quit naming “Czars”, and start learning how to govern- something that has been remarkably lacking from your agenda until now. Yes- I know that this will really piss off your “base”, but most of them can be placated with just a slight increase in their meds. 

Do it, do it now, do it for your country.

And quit listening to those idiots.

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Tags: crisis, economy, idiocy, reason, Soros