Tuesday, February 17, 2009

"I'm excited"

I'm excited - Maxine Waters (D-CA), ABC's This Week, 2/15/09 (said twice)
Representative Waters shared this feeling with us on Sunday with George in talking about the stimulus bill.  She's clearly pumped about taking billions of dollars from Americans (or printing them up, which will amount to the same thing) and dumping them into projects of dubious merit.  I've written before that it's probably necessary, that the spare capacity of the economy has to be soaked up somehow, and government will have to provide that (no matter how imperfectly).

But, "excited"?  Excited at what, the opportunity to spread the pork around under the guise of "necessary" spending?

Here's what Ms. Waters and her other excited colleagues should feel: stark terror, bowel-watering, hand-shaking fear that this massive transfer of wealth will suffer the law of unintended consequences.  Because let us make no mistake about it, this is an experiment, a shot in the dark by a group of people who have no real knowledge that it's going to work.

And it's an experiment that sits on top of all the other experiments we've suffered through these last decades.  Just to name a few:
  • Government can never do anything as well as ruthlessly efficient private industry.
  • Work can expand to employ everyone in the world with no harm to anyone.
  • CEOs should be trusted to make foreign policy.
  • Giving rich people as much money as possible allows everyone else to benefit.
  • Regulation just gets in the way of the business masters and should be dispensed with whenever possible.
  • Free trade is always a good thing; after all, our simple models tell us it's true.
And on and on.  Now we're buying into the idea that spreading incredible amounts of taxpayer money around will possess synergistic effects, as the "magic multiplier" that comes out of the world of economics (and we know there can't be anything wrong there) will create far more wealth than it costs.  (We still don't have an answer as to why we don't always run a gargantuan deficit, given that spending is such a good thing.)

We have serious commentators saying that it's time to nationalize our banking system, which is the same thing as admitting that we have no one who actually knows how to run a bank, so we may as well give government employees a shot at it.  We're propping up companies that are using that money to expand their overseas operations, showing us what may well happen to the "magic multiplier."  We have people saying that the answer is to spend money as if there's no problem, but those people will be nowhere to be found when the layoff comes and the debt crushes real American families.

This is not "exciting," this is terrifying, because there's a very real possibility that this new experiment will hasten the decline of the United States.  This is a time to set priorities, to understand that there are things that we can't do as individuals and as a nation, to start paring down the list.  But we're not doing that, we're still not getting serious, we're just spending in an orgy of excess under the theory that "all spending is stimulus."

I have hopes like everyone else.  I hope that Tim Geithner is the Chesley Sullenberger of the financial world, that he's going to take a shot at landing the economy on the Hudson, and that he can pull it off.

But what if the "experts" are wrong?  What if we've slipped across that boundary between reasonable spending to invoke stability, and complete unpredictable chaos?  I'll have more to say tomorrow about this from a personal standpoint, but only a fool would consider this Hail Mary "exciting," not considering how steep the fall into the abyss is.

2 comments:

Greg Glockner said...

"The law of unintended consequences"? I love it - exactly what we would expect when dealing with an public experiment. Brilliant.

JohnDiddler said...

Ms. Waters and all our leadership needs to communicate calm comfort, and you're naive to take her enthusiasm at face value.

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