found in this fark thread. Can’t believe I’ve never seen this before.
Author: Joe White
Government Intervention, Not the Lehman Collapse, Caused the Financial Crisis – WSJ.com:
To prevent misguided actions in the future, it is urgent that we return to sound principles of monetary policy, basing government interventions on clearly stated diagnoses and predictable frameworks for government actions.
Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far.
“Should the federal government be doing any of this?”:
The answer is no, of course, as Crisis and Leviathan author Robert Higgs explains in a superb article about the so-called stimulus for the Christian Science Monitor:
Our greatest need at present is for the government to go in the opposite direction, to do much less, rather than much more. As recently as the major recession of 1920-21, the government took a hands-off position, and the downturn, though sharp, quickly reversed itself into full recovery. In contrast, Hoover responded to the downturn of 1929 by raising tariffs, propping up wage rates, bailing out farmers, banks, and other businesses, and financing state relief efforts. Roosevelt moved even more vigorously in the same activist direction, and the outcome was a protracted period of depression (and wartime privation) from which complete recovery did not come until 1946.
Read the rest here.
The Frank-Obama Rescue Plan: Easier Money To the Rescue! (Reason-Hit & Run):
Once again, let’s review: We got into this mess because of what Obama castigated as “an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save.” And we’ll get out it precisely by…spending and borrowing more, especially on overvalued property.
Trade Lessons Unheeded – Cato-at-Liberty:
Leaving aside the many other disastrous implications of the pork-laden “stimulus” bill, here are some thoughts about its impact on international trade. For all practical purposes there is no difference between the Smoot-Hawley tariff bill of 1930 and the “Buy American” provisions in the $819 billion spending bill that passed the House Wednesday.
Smoot-Hawley was the catalyst for a pandemic of tit-for-tat protectionism around the world, which helped deepen and prolong the global depression in the 1930s. “Buy American” provisions will no doubt inspire similar trade barriers abroad and will have the same effect of reducing global trade—and therefore prospects for economic recovery. It is not unreasonable to say that U.S. policymakers are on the verge of taking us down that same disastrous path.
The bill that passed the House includes the following language:
None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States.
The version currently before the Senate contains the same language, which would seem to indicate that scrapping the provision won’t be necessary to reconcile the two versions in conference. So, unless the “Buy American” clause is dropped in the final Senate bill or is somehow defused during conference, the U.S. will have fired the first shot in what could evolve into a much wider trade war.
It’s usually better to be circumspect and to issue such dire warnings sparingly, but I see little room for alternative conclusions here.