Diary

Something is wrong

The dominant social theme of progressives in government and their allies in the press, is that economics is an ideology suitable for manipulation by the state to produce desirable political outcomes; and thus is not a set of immutable laws, the violation of which can and often do bring about some very nasty reactions, the extent being almost impossible to estimate in advance or quickly resolve afterwards.  Once started, these reactions often called unintended consequences must be allowed to fully play out. I only have one question for those who think the laws of the state can neutralize economic law. Suppose you are wrong and economics is a science whose laws are as immutable as those of any other science? You would then be acquiescing to the state the power to destroy everything economic. Even if their hearts are in the right place and they act out of compassion, the damage is the same.

 

Economic history is replete with examples of this. We have now shattered the post WWII trend of recession-recovery which would now have GDP growing at 8% along with falling unemployment. That same economic formula of printing new money to spend in unprecedented amounts occurring during the Bush times that started us on the road to this mess is now being used but in unbelievable amounts by the Obama Administration to get us out? As a voice of reason, Adam Smith once observed, there is still a limit to what an economy can endure. We just might be at that limit.