“Leaving Economics to the Economists, Not the Politicians”

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Leaving Economics to the Economists, Not the Politicians, by David White: Politicians explaining economics to the general populace is like having baseball stars explain theoretical physics for the masses… There is nothing simple or sound bite-sized, or easily understandable, about the complex tangle of interwoven threads that make up the current economic crisis – the fact that the world’s most gifted economists … are having real trouble getting their collective arms around exactly what needs to be done to fix a painfully obviously broken economic system, should tell us something about the presentation of economics issues for the average layperson by the average politician. … Is it any wonder, therefore, that, when faced with an implosion of our financial institutions and world economies, which some have compared to the Great Depression of the 30’s, that few, if any, can really follow the economics issued presented?

Gov Bobby Jindal of Louisiana … is about to make a huge mistake, which is a working lesson in this principle. Gov. Jindal has said he will turn down the Obama Stimulus Package Federal dollars aimed for Louisiana… The Hannity’s and Limbaughs of the Talking Heads political world have gone to great lengths demonizing the Stimulus (and everybody who rode in on it), comparing it to Socialism and it’s inevitable boogeyman following close behind: Communism. Even Newsweek’s cover proclaims: “We’re all Socialists Now.” This has directly led to the mistake that Jindal is about to make.

Let’s get real for a moment here. Anybody who has ever received Unemployment, or Social Security, or Veteran’s Benefits, or a whole host of other government-supplied money, has dipped a toe into the vast wading pool of Socialism… When banks fail and the FDIC (or S&L’s, and the FSLIC) takes them over – some 14 so far this still new year – we are witnessing Socialism in action right here in the good old US of A – it’s not something new at all. Let’s not all be quite so shocked about the fact that our brand of Capitalism has morphed light years past the unbridled, free-ranging form that allowed 19th Century Robber Barons and the Big Four to run America … as their own fiefdoms for decades until the Populist movement of the early 20th Century came along… Without welfare, food stamps, disability benefits (both on the state and federal level), and many other such societal safety nets,… our homeless numbers [would be even larger than] now.

When all other economic re-tooling mechanisms have been tried and failed and the Federal Funds Rate is effectively at zero;… the idea of providing economic Stimulus … is the only arrow left in our quiver to fight this good fight. ‘Stimulus means spending,’ as the President bluntly said…, and we have to get used to that and learn to make that do the job which it is designed to do, or we have to get used to the fact that we are embarking on our own Lost Decade like Japan’s in the ‘90’s…

Making this complex knot of economic trouble into a political issue at this critical juncture is an instance of complete denial of the reality all around us… It is the kind of exploitation that we don’t need right now, even though I am sure that riding this media horse has generated huge TV and radio ratings…– but, it is totally counter-productive when we should all be rowing in the same boat as the river continues to rise. The thousands who could have been employed in Louisiana and the thousands more who finally could have re-built their Katrina-destroyed homes and businesses with the Federal Stimulus money that Gov. Jindal is about to give back, will, in the end, be very sorry he did that. I predict that Gov. Jindal will be, too.


Originally published at the Economist’s View and reproduced here with the author’s permission.