Screaming at the NYTimes
David Brooks' recent column makes me scream at the newspaper. He writes how the stimulus package cost us taxpayers $7,798 each and didn’t create the jobs that it promised. Big surprise. A year and a half ago, Obama said, "There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart our economy." No disagreement? I interviewed 40, of the more than 200 economists, who signed a statement put out by the Cato Institute saying they did NOT think a big stimulus package was the best way to handle the financial "crisis."
The stimulus just squandered billions.
Brooks then writes things that make me applaud:
... [D]eficit spending to pump up the economy doesn’t make consumers feel more confident; it makes them feel more insecure because they see a political system out of control. Deficit spending doesn’t induce small businesspeople to hire and expand. It scares them because they conclude the growth isn’t real and they know big tax increases are on the horizon.
More applause here:
... [I]n many cases, large and decisive deficit reduction policies were followed by increases in growth, not recessions. Countries that reduced debt viewed the future with more confidence.
... This was true in Europe and the U.S. in the 1990s, and in many other cases before. In a separate study, Italian economists Francesco Giavazzi and Marco Pagano looked at the way Ireland and Denmark sharply cut debt in the 1980s. Once again, lower deficits led to higher growth.
Bravo for Brooks. He gets it. And puts it in the newspaper that rarely gets it. But then he makes me scream at the paper by going on to recommend things like:
[M]aking the welfare state more efficient, boosting innovation in areas like energy, spending more money on growth-enhancing sectors like infrastructure...directing more money to address the trends that threaten to hollow out the middle class.
Please. This is government. I hope officials will try to improve welfare, but they will never make it more efficient. Government has no clue how to boost innovation in energy, and attempting it diverts money from entrepreneurs who might. Government already spends plenty on infrastructure. The best way to help the middle class is to get out of the way.
Brooks is a Big Government conservative. Big Government conservatives have a romantic faith that government can do things it has almost never successfully done.
[G]overnment will have to spend less, but target better.
As if that can happen.
That will require enormous dexterity and intelligence from a political system that has recently shown neither.
Recently? How about never? Command and control cannot compete with the dexterity and intelligence of hundreds of millions of brains cooperating though the magic of the free market.
what we need are clear rules for business--rules that don't keep changing with the political winds. We need some regulations that hold people and companies responsible for their actions, but fewer of them. How about: keep your promises, don't lie, and don't take other people's stuff.
We need a low flat tax for business (and for everybody else). If politicians did those things, we'd have the kind of job creation that we want.
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