The same old deal

James Pethokoukis via Instapundit:

The American Recovery and Reinvestment Act was Barack Obama’s signature achievement in dealing with the most worrisome set of economic conditions since the Great Depression. It was how Obama, to use a pair of his now seemingly abandoned metaphors, sought to drag the economy out of the ditch while the Republicans were standing around sipping Slurpees.

As Obama said on the first anniversary of signing the bill, “It is largely thanks to the Recovery Act that a second Depression is no longer a possibility.”

No, it's partly thanks to the epic and wasteful government spending that we'll see the Great Depression 2.0.

The New Deal had the same effect in the 1930s. FDR tried many different policies which were puzzling and economically destructive but it gave the appearance that he was doing SOMETHING instead of doing nothing like those heartless republicans.

A small sample of what went on in the 1930s:

1. Farmers, who were a decent chunk of the voting bloc, hated low prices for food. So, the US government gave handouts to farmers to not grow food! That's right. Millions are without jobs. Many have lost their savings when hundreds of banks failed. They don't have money for utilities or food. Yet, the government is taking money out of the private sector and handing it to a special group ... so that food prices stay high.

2. The government enforces a minimum wage. If a person wants to buy a service, let's say a haircut for $0.50, then that's illegal because the minimum charge ought to be $0.60. Some "criminals" ignore the law and offer a haircut for $0.50 anyway. When the cops find out, they go to jail. This actually happened -- a person spent time behind bars because they took a lower than mandated wage for a haircut!

3. Promotion of labor unions. They increase the wages of workers in the union but overall decrease the number of employed workers in the economy. Not something you would want in the middle of a depression.

Comments

[Classical Liberal]

In the same vein, I recently found out that (according to Wikipedia) 36 U.S. states require a so called Certificate of Need before expanding or building new hospitals or certain medical facilities. And people wonder why hospital costs rise! This is great for existing hospitals, lousy for everyone else. I wish politicians had to take Econ 101 before runniing for office.

[Isaac Schrödinger]

Yeah, Nixon came up with the, er, CON to cut health care costs!

It's truly sad when students taking high school economics know that limiting supply in no way suppresses prices. Yet, politicians impose such damaging policies on millions of people.

Some, here in Canada, refer to me as "right wing" when I talk about similar matters. To me it's not even a liberal/conservative or left/right issue. It doesn't matter who supports such a policy in any context, it theoretically and factually fails.

Don't get me started on social "security" ...