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I'm From The Government, And I'm Here To Help You -- Part II

(This was originally intended as the conclusion to my earlier piece, but I had a brain fart while writing that one up.)

So, what does work in times of economic slowdown, in ways that actually matter and last?

The toughest thing imaginable to the current power elite:

Nothing.

More specifically, having the government do nothing, and trusting the American people and American private industry work the problem.

Generally speaking, money given to the government is money that is wasted. A great deal of it is consumed in "overhead." More is directed towards largely worthless expenditures that politicians use to further their own ends -- usually, rewarding their supporters and punishing their opponents. Plus there's the whole "in perpetuity" thing -- once a government program gets started, it's almost impossible to kill it.

Again, let's go back to the "Cash For Clunkers" program. That one had one element that made many of us small-government type's hearts swell: it came with an expiration date and a cost ceiling. But there were quite a few people who called for it to be given more money, extended longer, and start creeping towards yet another standing government program.

On the other hand, cutting taxes and allowing American citizens and businesses to keep more of their own money -- that one has a distinguished history of promoting economic recovery and growth. Because private individuals and corporations aren't burdened with seventeen zillion worthless layers of bureaucrats who all need to be properly appeased and given their "due" on every project. Because they don't have to put up a building in West Virginia before they can hire seven people in New Hampshire. Because they can't count on getting at least as much money next year, if not more.

Most importantly, they're handling their own money, for their own benefit. It's in their self-interest to get the best use out of that. Government workers, on the other hand, look at their budget and know that if they don't spend every penny by the end of the fiscal year, then they can expect to get their next year's funding cut. On the other hand, if they run up short, they can argue that they need even more money next year. And that dynamic which works so well in government is a ticket to bankruptcy in the private sector.

I hate to quote Ayn Rand's "Atlas Shrugs," but she nailed it at the end when John Galt -- imprisoned and tortured by the government for his "secrets" on saving the crumbling economy -- answers them succinctly, on live television:

"Get the hell out of my way!"

That's the best thing the government can do. And while it will cause pain in the short term (or, rather, allow the suffering to continue instead of ameliorating it), it's pretty much the only thing that it can do to fix things long-term.


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Comments (11)

Ain't gonna happen with the... (Below threshold)
GarandFan:

Ain't gonna happen with the current administration. They know everything. Just ask them. Surprised Barry hasn't yet named a "Central Planning Czar". Look how well it worked for the old Soviet Union.

Ain't going to happen with ... (Below threshold)

Ain't going to happen with any administration - liberal or supposedly conservative - as society is not equipped to say 'sorry, but we're not helping you, so you either fix things yourself, persuade friend or family to help or go die in the street'. Homeowners behind on their mortgage? 'We' have to help. People living in a city below sea level get flooded? 'We' have to help. Work for a bank that makes bad loans? 'We' have to help. Having trouble paying your credit card bill? 'We' have to help. Work in a city targeted by terrorists? 'We' have to help. Work for a domestic tire manufacturer crippled by high labor costs? 'We' have to help.

No administration has or ever will refuse to help, the best the GOP can do is help less than the Democrats.

And as Jay points out, this 'help' has to be paid for by someone else whether in taxes or restrictions on their freedom.

GarandFan: "Surprised Ba... (Below threshold)

GarandFan: "Surprised Barry hasn't yet named a "Central Planning Czar"."

Geez, did ya have to remind them??

This regime has ZERO faith in the American system, or the American worker within it. They have ULTIMATE faith in themselves.

Thus, to them, "soft-slavery" under them is far better than the messy business of freedom. Heck, we might make BAD choices (what to eat, what to drive, how much to pay our employees...)

Because private individu... (Below threshold)

Because private individuals and corporations aren't burdened with seventeen zillion worthless layers of bureaucrats who all need to be properly appeased and given their "due" on every project.

Obviously you've never spent a lot of time in a very large corporation!

From the same buricrats tha... (Below threshold)
Flu-Bird:

From the same buricrats that would destroy your home trying to kill a fly then declar the fly endangred and shut down the whole neighborhood to protect one worthless insect

Oh yeah, in the face of eco... (Below threshold)
jim x:

Oh yeah, in the face of economic meltdown the best thing to do is do nothing and hope for the best.

In other words, Herbert Hooever circa 1929. Boy that worked out well, didn't it?

Come on, guys.

Lot of analysis around, Jim... (Below threshold)
JLawson:

Lot of analysis around, Jim X, concluding the policies adopted by Hoover and Roosvelt made the Great Depression worse and longer than it would have been otherwise. I think it's fair to say that what they did certainly didn't help it much. And there's argument both ways.

I think we ought to do a crash program on time machine development, and figure out a way to send a history book extensively covering 1929 to 1950 back to President Coolidge around 1925 or so...

But then again, in 1925 how much of that future history would have been seen as fiction and science fiction? They certainly wouldn't have believed such a crash would have been possible, much less something like a city-destroying bomb could be developed in such a time frame to combat an enemy like Japan. Or that Germany would spiral into a conquering madness, or that the USSR would be so destructive of its' own people...

Just when you think you know where history is heading, someone comes along and throws a damn wrench in the works and pieces start flying everywhere....

Some of Hoover's policies w... (Below threshold)
GarandFan:

Some of Hoover's policies were correct, others, like the imposition of trade tariffs (which other countries also instituted) made matters worse. Countries had weathered such before, the problem was the scope of this one as well as it's depth (impact) and length.

FDR did not pull us out of the depression. Full employment by WWII did that. FDR's Sec Treasury said something to the effect in 1939 '...all that money wasted...we accomplished nothing'.

Yep, had farmers spill milk onto the ground, kill pigs and cattle to drive UP prices. Hired men to shovel rocks into a truck, which the truck promptly dumped back onto the ground. They did excel in some WPA projects because the money invested created infrastructure from which wealth was derived. Unfortunately most of it was like the current "Stimulus". Long on shoveling rocks, short on creating something that creates wealth.

Not only do you have the tr... (Below threshold)
Anon Y. Mous:

Not only do you have the tremendous waste when the government inserts itself into the economy, but even worse that that, it has the effect of freezing the private sector because of uncertainty about what the government is going to do next. There is nothing more scary to an investor then the thought that the government may radically alter the playing field. So, they sit on their investment as they try to get a handle on what the future conditions will be. And the economy continues to decline, causing the statists to become even more aggressive in their demands to interfere in the economy.

Nothing sure is a wonderful dream.

"Lot of analysis around, Ji... (Below threshold)
jim x:

"Lot of analysis around, Jim X, concluding the policies adopted by Hoover and Roosvelt made the Great Depression worse and longer than it would have been otherwise."

Sure - all of them conservative idealogues.

Nearly all - and I'm tempted to say all - nonpartisan economic experts agree that Hoover's less active policies made things worse, and FDR's more active policies made things better.

"FDR did not pull us out of... (Below threshold)
jim x:

"FDR did not pull us out of the depression. Full employment by WWII did that. "

FDR's main policy was to put money in the hands of the poor and middle class, so they could spend it and restimulate the economy. FDR's main way to achieve this was through massive Federal spending programs.

WWII was, besides being a war that needed to be fought, a massive Federal spending program.

So in eseence, the very example you're citing proves that Federal spending can improve the economy.




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