A Lesson From Abroad

If the masses were all fresh out of Econ 1-A, then Frank, Dodd, Clinton and Obama would have been hung by their thumbs for protecting the twins (Our Heart of Darkness), thus igniting a firestorm, one which came within an inch of consuming the world economy. If McCain could have made the point, he would have won.

But there is easier economic stuff that most of us now do understand; key among these - the massive spending to spark jobs; it was a flop.



Background: A few of us knew the stimulus would fail before the horse left the barn. Last year we called it a tragedy. These things don’t work; they can’t.

Recall that unemployment peaked at 9% two months after the Oct/29 crash, and then began to drift lower, down to 6.3% by June/30 when the first big federal intervention occurred. Within six months, the trend reversed and hit double digits in Dec/30. Hoover's interventions were followed by FDR's massive interventions and unemployment stayed in double digits for the rest of the decade.

BO got in the act and deja vu.



Most reasonable folk know the gov’t cannot and never has created jobs on net. We’ve explained just why in numerous past blogs. The left’s pandering helps out the unions big time, but not measured US unemployment.

However, others of the developed world are not so stupid, or in BO’s case, so cowardly. Chris Caldwell of the Weekly Standard notes that, “Germany has been scolded, even browbeaten, by Obama administration officials, from Treasury Secretary Timothy Geithner on down, for saving too much and spending too little. It has refused to stimulate its economy as the United States has done, on the grounds that the resulting budget deficits would not be sustainable and the policies themselves would not work.”

Germany got hit as bad or worse that we did, Q4' 08. But guess what? Germany is growing at roughly 9% / yr. It’s unemployment rate is 7.5%, the lowest in 18 years. Need we say more?

Kennedy had some idea, Reagan knew exactly - you inherit a recession, then cut taxes and stand back. Your job is to do what you know is right, to do your constitutional duty and to hell with the political consequences. As a leader, you’ve got to have courage to do this, to stand alone. BO didn’t.


Robert Craven