Some Economists Say Best Way to Battle Recession Is a Do-Nothing
abc news
By JOHN HENDREN and MELLEN O’KEEFE
Jan. 31, 2009
The debate on Capitol Hill this week is all about the size of the stimulus: Should it be big? Bigger? A behemoth? But there is another school of thought that’s getting less attention.
Call them the do-nothings.
In these free-spending times there’s a growing movement among economists who say the best way out of this recession is to do nothing, nothing at all.
“I think there’s nothing wrong with doing nothing,” David Henderson of the Hoover Institution told “Good Morning America.”
Nor do the 250 other economists who signed on this week to an ad in the New York Times and Washington Post.
“Government just doesn’t work very well,” said Dan Mitchell, a senior fellow at the Cato Institute. “We tried big spending under Bush, it didn’t work. We tried big spending under Hoover, it didn’t work.
“A lot of bad government policies got us into this mess and we don’t have a magic wand to get us out right away,” he said. …
Just what are they talking about when they say:
“Government just doesn’t work very well,” said Dan Mitchell, a senior fellow at the Cato Institute. “We tried big spending under Bush, it didn’t work.
What BIG SPENDING under Bush is Dan Mitchell talking about? The Iraq war? The stimulus program? Both?
If Mr. Mitchell is saying what Mr. George W. Bush tried did not work, the world already has experienced that fact. But Mr. George W. Bush’s government was not indicative of American governments in general. Mr. Bush’s government with neocons driving it turned into a disaster. There is a hint here that something Mr. Bush tried was suppose to work. That is wishful thinking.
Mr. Mitchell may be close to being correct if he is saying Mr. George W. Bush spent BIG on the Iraq war and that did not work – there he might get other than neocons on his side.
Mr. Mitchell said:
We tried big spending under Hoover, it didn’t work.
If Mr. Mitchell is talking about the Hoover who presided over the Nation’s first Depression then eyebrows should be raised. Those 30’s Republicans were interested in using TARIFFs to bail America out of the depression. No one was speaking of “cause and effect” regarding the TARIFFs but after the TARIFFs were applied, what was an American depression turned into a WORLD WIDE DEPRESSION. Other countries followed America’s lead on TARIFFs.
Mr. Mitchell also said:
“A lot of bad government policies got us into this mess and we don’t have a magic wand to get us out right away,”
It is said that, “Confession is good for the soul”. The above statement is good for the soul. Mr. Mitchell put his finger on the CAUSE of the economic meltdown. And if the cause of a problem is known why not fix the problem by addressing its cause. That is a rational approach. How could it make sense to do otherwise? If bad government policies got us into this mess, admit it(even though it pains neocons) and proceed with the problem solution.
The idea of doing nothing while waiting to see “HOW LOW WE CAN GO” is ludicrous. But it might cast suspicion away from the current neocons who got America into this mess.
The below is an excerpt from the Hoover Institution’s Mission Statement:
… Ours is a system where the Federal Government should undertake no governmental, social or economic action, except where local government, or the people, cannot undertake it for themselves…
http://www.hoover.org/about/mission
While America’s federal government is certainly powerful – in the hands of some “administrators” it can host a series of mistakes, train-wrecks and miscues. That is the current situation today. If the federal government makes mistakes, the federal government owns the mistakes. And a member of the old Bush team made that point clear when he said, of Iraq, if you break it you own it. The Bush team broke Iraq but handed the broken pieces to Iraqis to put together again.
If the federal government creates an American problem, then the federal government owns that problem. Ex-President Harry S. Truman put his “The Buck Stops Here” on his desk. For the neocons it has been, “round and round she goes – where she stops nobody knows”.
Tags: cato institute, dan mitchell, tariffs
