Every sane adult knows what it takes to pull out of an economic deadfall: you tighten budgets, cut inessentials, pay as you go and restructure your debt - and hang on to your current job for dear life. And we also understand that, when it comes to a national economic crash, the same principles apply - with the addition that you stimulate the economy briefly with increased spending, you cut taxes and loosen onerous regulations, maintain free trade because the alternative is so much worse, and you support innovation and new company creation in hopes that a new cohort of hot companies will help pull you out.
What you don’t do is nationalize industries under emergency rule and make them less efficient, you don’t conduct social experiments with large segments of the economy, you don’t increase expensive regulations on industry, you don’t pile on massive amounts of debt that will flatten any economic turnaround when it finally comes and that will take a generation or more to pay off, you don’t turn against entrepreneurs as they are your last best hope, and you don’t increase taxes on the most productive members of your economy.
Only fools and ideologues don’t know all of this. And yet, that is what smart people in Washington did in the 1930s - at the very moment when they seemed to have the Depression beaten - and that is what Washington seems to be doing today.
Tuesday, June 30, 2009
Something to get you all prepped up for THE BEST DEFENSE: SURVIVAL tomorrow night, from Michael Malone at PajamasMedia: