In line for that bailout cash


Prolonging the disaster
I haven't reported on the accountants or the travel agents.

But there are five states in line.

And now the steel industry.

According to BailoutSleuth, there are now 282 banks, thrifts, and lenders participating in the bailout.

Where does it end?

John Stossel says it won't end with Obama. Emphasis added.

So they will "transform our economy." Obama's nearly trillion-dollar plan will not merely repair bridges, fill potholes and fix up schools; it will also impose a utopian vision based on the belief that an economy is a thing to be planned from above. But this is an arrogant conceit. No one can possibly know enough to redesign something as complex as "an economy," which really is people engaging in exchanges to achieve their goals. Planning it means planning them.

Obama and Emanuel want us to believe that their blueprint for reform will bring recovery from the recession. Yet we have recovered from past recessions without undertaking a radical social and economic transformation.

In fact, reform would impede recovery.

This is not the first time a President chose reform over recovery. Franklin Roosevelt did it with his New Deal, and the result was long years of depression and deprivation. Roosevelt's priorities were criticized not just by opponents of big government but by none other than John Maynard Keynes, the British economist whose theories rationalized big government. Before FDR had been in office a year, Keynes wrote him an open letter, which was printed in The New York Times:

"You are engaged on a double task, Recovery and Reform; -- recovery from the slump and the passage of those business and social reforms which are long overdue. For the first, speed and quick results are essential. The second may be urgent, too; but haste will be injurious. "¦ (E)ven wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action. "¦ Now I am not clear, looking back over the last nine months, that the order of urgency between measures of Recovery and measures of Reform has been duly observed, or that the latter has not sometimes been mistaken for the former."

Note Keynes's concern. Government interventions, such as the cartelizing of industry through the National Recovery Administration, "will upset the confidence of the business world and weaken their existing motives to action." In other words, investors will not take the risks necessary for recovery if their profits and freedom are subject to unpredictable government action. Economic historian Roberts Higgs calls this phenomenon "regime uncertainty."

It's too late to fix it. Grab some popcorn and watch, it's going to be a sharc gib.

That's big crash spelled backwards. Afterwards the politicos and technocrats will be whimpering as the rest of us pick up the pieces.

The economy is not something that is controlled from the top down by Washington. They just haven't learned that yet.

It will be the most expensive lesson in history.

— NeoWayland

Posted: Mon - January 5, 2009 at 02:28 PM  Tag


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