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Jeff Harding: Conventional Wisdom and Our Stagnating Economy
Gallup came out with a recent poll that revealed an interesting sentiment held by our fellow Americans:
“More Americans say it is important that the federal government enact policies that grow the economy and increase equality of opportunity than say the same about reducing the income and wealth gap between the rich and the poor. ...
“These data, from a Nov. 28-Dec.1 Gallup survey, show that while 46 percent of Americans believe it is extremely or very important that the federal government in Washington reduce the income and wealth gap between the rich and poor, 70 percent say it is important for the government to increase equality of opportunity, and 82 percent say it is important for the government to grow and expand the economy.”
I think the poll’s purpose is to send a message to our politicians that the Occupy Wall Street movement is not as significant as “making the economy grow.”
Normally I would laud this sentiment, but if you think twice about it, it is telling us that a strong majority of Americans believe that government has not only a role in making the economy grow, but that it actually can do that. That is not a very encouraging sentiment, but it is the conventional wisdom. It would be nice to think that those polled believe that the government needs to do less (i.e., get the hell out of the way) and let businesses create wealth and jobs, but I don’t think that is the case.
The great H.L. Mencken referred distastefully to the American electorate as Boobus Americanus. In terms of understanding economics, that pretty well sums up the conventional wisdom people profess. It is my belief, if you scratch the average American, she would say that the government should “run” the country and the economy. That is not only wrong, but dangerously wrong as we have learned from our current depression. The government was the main cause of this depression as well as the Great Depression, but the opposite view (‘unregulated capitalism”) is one that has taken hold of society.
If you disagree with this viewpoint, then ask yourself, why hasn’t the economy recovered in light of all the money poured into the economy by the government and the Fed? Why is the economy stagnating and not swinging back into positive territory? Perhaps you might wish to consider that the policies advocated by all the economics experts have been implemented and have failed and thus perhaps their policies are wrong. Or perhaps you would like them to continue doing the same things to the same results.
The Daily Capitalist is all about change — for the better. It’s called unconventional economics wisdom: policies that have been proven to work time and time again to make economies grow and people prosper. Perhaps we should try the unconventional, which is the opposite of what is now being done.
— Jeff Harding is a principal of Montecito Realty Investors LLC. A student of economics, he has a strong affinity for free-market economics. This commentary originally appeared on his blog, The Daily Capitalist.
» wrote on 12.27.11 @ 02:42 PM
Harding is right. America is not [and never has been] a socialist, communist, or
Fascist state. Government is not supposed to control or order the economy.
It is one of the many stated responsibilities of the Fed to take “appropriate action” to foster a strong economy, however.
It is also true that Too Big To Fail, where American taxpayers bailed out inept
management and short-sighted bets by U.S. corporate and financial giants was
equally unjustified.
As Ron Paul (and Milton Friedman, before him) pointed out, in a true Free Market
economy, success should breed immense rewards, and business failure should
result in immense losses, or bankruptcy.
Bush, Paulson, Cheney, Greenspan, Rove, Hastert, most of the Party of NO!
leaders in the post-Reagan generation, seem to believe that Government’s job
is to subsidize defense contractors and gross polluters (who might otherwise
be un-competitive in world markets), insurance companies, and resource
extraction interests, who make most of their money in Free Trade, shipping
domestic jobs and resources all over the world to feather their bottom-lines.
That is NOT true free-market capitalism either. And the “job creation” Harding
extols is happening in CHina, India, Viet-Nam, Ireland, the Phillipines, using
American investment and corporate dollars, underwritten by American taxes.
Is that the kind of prosperity or job creation Harding has in mind?
Besides Ron Paul, which Republican candidates support a true Hands Off approach?
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