Intervene, or not? Obama's latest blunder...

[native]

Thomas Sowell compares difference between the free market and government intervention in stock market crashes:

"...if you look at the facts, they go like this: Unemployment never hit double digits in any of the 12 months following the big stock market crash of 1929 that is often blamed for the massive unemployment of the 1930s. Unemployment peaked at 9 percent, two months after the October 1929 crash, and then began drifting downward.

Unemployment was down to 6.3 percent by June 1930, when the first big federal intervention occurred. Within six months, the downward trend in unemployment reversed and hit double digits for the first time in December 1930.

What were politicians to do? Say "We messed up"? Or keep trying one huge intervention after another? The record shows what they did: President Hoover's interventions were followed by President Roosevelt's bigger interventions-- and unemployment remained in double digits in every month for the entire remainder of the decade.

There is another set of facts: The record that was set in 1929 for the biggest stock market decline in one day was broken in 1987. But Ronald Reagan did nothing-- and the media clobbered him for it.

Then the economy rebounded and there were 20 years of sustained economic growth with low inflation and low unemployment..."



Read more: http://www.gopusa.com/commentary/2010/0 ... z0yy8ASQnt" onclick="window.open(this.href);return false;

[AZGrizFan]

If the stimulus isn't working, the true believers have to believe that it is only because it hasn't been tried long enough, or with enough money being spent.

There are always calls for the government to "do something" when things are going bad. Those who make such calls have almost never bothered to check out what actually happens when the government does something, as compared to what happens when the government does nothing.

A-fucking-MEN.

[GannonFan]

Government intervention, per se, isn't the problem. It's what shape that involvement takes and how much distortions (and how severe those distortions) because of the involvement. Hoover letting the Hawley Smoot Tariff happen was a case of a huge intervention having huge distortions and the obvious negative effects on the economy. For Obama, it's just the sheer size of the deficits - govt spending was already a big problem and one of the main reasons why the GOP was thrown out of power legislatively in '06 and from the executive in '08 - doubling and tripling down on that mistake has been Obama's biggest mistake, along with the fact that what we doubled and tripled down with didn't get at the root of fixing the economy.

Like I said before, spending a whole year and a half on the health care bill, when the Dems could've passed anything they wanted to with the supermajority, while the economy was floundering, was almost Nero-like.