Tuesday, February 24, 2009

An Ecomony with a Bad Flavor

I just mentioned that I have worries about the economy, despite my attempts to report the good news many people (such as my math students) are not hearing.

My worries stem from an increase of inept government regulation.

Regulations were the primary cause of this recession. Yet the same members of Congress that did so much harm are now leading efforts at recovery. Bank holding companies gave lots of money to these men and wanted help in return, so Congress helped these holding companies instead of the banks. and might do much more harm. In a few key Democratic states a few people need help with mortgages and Congress again acts causing trouble.

Beyond this cronyism, the government is using the recession to interfere in health care, welfare reform, and job dependence. The government and media are also lying about economic history.

This is not what people want or voted for.

Although I personal favor small-government I am not worried by all big-government trends. This country has survived and prospered within those.

But inept big-government trends caused this recession, and fixing the Entitlement Crisis will require skilled politicians. I have worries because there seems to be a lot more cronyism and meddling and foolishness than skillful fixing.

Too much is at stake and bad politics is too divisive.

(Many links from Glenn Reynolds and Greg Mankiw. Thanks!)

UPDATE: The president's address to Congress today was dishonest in placing blame for this recession in all the wrong places. Dependence on foreign oil? The cost of health care? Inadequate public schools and higher education? National debt? Sure, these are problems, but none of them caused this recession. Furthermore, his sentences
In fact, a failure to act would have worsened our long-term deficit by assuring weak economic growth for years.
But while the cost of action will be great, I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.
flatly contradict the CBO analysis. He continues the save or create hand-waving. His explanation about banks not lending ignores the above-linked information about bank holding companies and banks. He wants to make hybrid car batteries here? As I concluded before, I don't mind a "more strings attached" attitude if it is honest and skillful, but what I am seeing instead is our president following dishonest and misguided congressional leaders.

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