July 9, 2009

We're on a road to nowhere

Want a real "path to prosperity?" Look to 1982. The year of Tootsie and Culture Club has a lot in common with 2009 (without the drag).

Amity Shlaes's piece at www.bloomberg.com is a must read for those who, like myself, are scared witless by the President's prescriptions for what ails the economy. Argue all you like, but I still believe government intervention, rather than so-called deregulation, is the main reason for where we now find ourselves. Shlaes rightly notes the two years aren't exactly alike, but close enough for a reasonable comparison.

"Somehow, the 1980s and the 1990s turned out to be pretty good years," she writes. "So it's worthwhile to compare current policy to the one followed then."

The obvious conclusion is the steps we're taking now are pretty much the exact opposite of what happened then. The President's chief-of-staff, Rahm Emanuel, likes to say the path is negotiable but the end result is not. I'm not sure how the path is negotiable if it starts in the opposite direction. A second stimulus package is now seriously being floated, mere months after the first. None of the promises made about the first have come to light. For those tempted to say it's too soon, remember, the administration promised immediate results. In fact, that was the main selling point of the plan. Former Bush Administration official Keith Hennessey notes that unemployment is now higher than the administration said it would be if the stimulus wasn't passed. And they say laissez-faire is dead? Hardly. It'll just take a lot longer to get to 1983.

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