Skip to comments.An Unusual Economy? (Thomas Sowell)
Posted on 08/29/2011 12:20:07 PM PDT by jazusamo
click here to read article
>>>>Government intervention may look good to the media but its actual track record both today and in the 1930s is far worse than the track record of letting the economy recover on its own.
He is correct, of course. Doing nothing would be far preferable to what Obama is doing or what the Republicans are proposing. Just leave the economy alone and it will get better.
Government actions are unpredictable.
The market hates unpredictability.
It is as if you spent a lot of time researching fast horses and good jockeys with an eye towards betting lots of money, but when you showed up to the races they announced that they had an official who would add or subtract from race times as he saw fit.
Still want to bet your money?
He’s right, of course. But additionally, I think there is a demographic factor. Baby boomers, of which I am one, are simply going to be spending less from here on out. My kids are grown, so I’m not buying stuff for them anymore. I’ve bought and furnished my last house. I no longer need four cars and the two that I have I’m going to keep around for awhile. I’m socking money away for old age.
The company I work for laid off a third of our permanent work force and replaced them with temporary employees. They don’t have to pay the temps benefits.
I agree. I'm 55 and I don't plan on making any more major purchases in the foreseeable future. We actually started planning for this about 7 years ago.
Unusual to say the least.
Read this guy’s blog on the economy. He testifies in Congress quite a bit (and gets called an ideologue by the Dems). Pretty funny - he simply stands for free markets and little government involvement.
That’s understandable right now though tough on workers. With the way things are the temp agencies are having no problems getting good workers.
It was government policies that kept the great depression alive until after WW2.
Sowell’s analysis is spot on but incomplete. The best economic analysts I’ve been reading have made the point that this isn’t a standard 20th century “recession”, nor is it really like the Depression, although it feels that way. Rather, this more favorably compares to a 19th century “contraction” which occurred for 16 years in the late 1880’s. By Contraction is meant that the economy is in fact shrinking; thus for example, we’re seeing far lower employment rates expressed as a percentage of eligible working population holding jobs. That rate is down to something like 63%. Typically it runs in the high 80’s. At the same time, we’re seeing a serious “wealth” contraction with something like 1/3 of the residential real estate market under water with no hope for recovery. Housing hasn’t really ever bottomed out.
I “think” (meaning I’m not sure) the problem may well be twofold, 1) too many are being paid far too much to not work and 2) horrible trade policy has incentivized the offshoring of jobs.
There being little in the way of political talent in the offing, I don’t expect any speedy resolution to this mess. For all practical purposes, this is the “new normal”.
The worry is for the ‘class warfare’ people, in media/Dem politicians/the usual suspects, to coordinate their effort and brand those of us ‘unpatriotic’ and escalate their unhappy feelings.
They truly want a civil war, and think they can come out from it the winner.
As a fellow baby boomer (tail end of the era) I agree, however, Doctor Sowell used as an example the 1920 recession. There were no baby boomers during that recovery. It is not that we spend less, we are a bigger hit on the economy as we retire. That said, when you paid into a system for 47 or more years, considering you a problem now after taking your money for so long is unethical and a result of mismangement by the government.
Same here; I’m 51 but the only expenses left are to put the kids through college. We have a nice home in a nice neighborhood and don’t plan on moving or any major upgrades now that the basement is finished. The cars are paid for and well-maintained; I’ll keep them until they are ready to return to the soil from whence they came.
Most people in my age bracket are doing the same (if they have any sense, that is).
The media, as usual, professes to be shocked, *shocked*!, that direct government control over large sectors of the economy doesn’t produce prosperity and happiness.
Excellent point and right on. I sometimes wonder what it would be like to have a media that would present the news and conditions without their obvious leftist slant, but then we couldn’t refer to them as the enemedia. :)
Or the Democrat Propaganda Ministry.
Not to mention, I am not interested in discretionary spending until 0bama is out of the WH. I do not want to contribute in any way to the potential “success” he might claim if it appeared we were having a recovery. We are truly middle class in my household. If I have this attitude, think of the money being held back by the “wealthy”.
“He also got away with it politically by blaming his predecessor.”
Until he was able to get us into WWII, after promising that he would not.
The Depression ended when Roosevelt’s heart stopped beating. He was our version of a leftist dictator. Only the Constitution and the Supreme Court kept us from going completely totalitarian.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.