I have hesitated to pontificate in detail on the macro-economic and financial storm that is lashing us all for the simple reason that I do not fully understand the details. My ignorance is shared by virtually all the world's political and financial leaders, including potential leaders like McCain and Obama. Of course, that is not to say that they don't all have opinions on the subject but it should never be forgotten that they don't really know what they are talking about! As I have remarked before, in such a confused and confusing maelstrom, it is very human to reach for a touchstone, a cherished idea, an ideology, upon which you base your world view, even as you are buffeted this way and that by "Events, dear boy, events!" Thus it is with them, and thus it is with me.
I base my own entire world view on the premise that governments should come with a government health warning! Almost everything governments do is usually wrong, or badly executed, and is always more expensive than it need be. Unfortunately there are certain activities which only governments can do and one must simply grin and bear it. However, the imperative is always to keep what governments do to an absolute minimum. I hasten to add that were my principles to be enacted (don't hold your breath!) Nirvana would not be created, life would still be pretty much of a mess, but it would be less of a mess than it is under the present system of increasing governmental powers which, I should add by way of warning, are now being strongly reinforced by an even higher level of power in the proliferation of global governmental institutions.
Given all of that, you will understand my deep suspicions concerning the rush by governments to interfere in the market place. Apart from anything else, they hardly ever rush back again when the emergency is over, it takes a Reagan, or a Thatcher, or a Clinton - er, 'Bill the Bright', that is, not 'Hill the Pill' - to actually retract governmental power. It seems to be an economic 'given' that in these straitened(*) times it is essential that money be spent on a huge scale in order to re-stimulate the economy. The question is, who should spend it, the government or us? Instinctively, without too much thought, relying entirely on my gut, my answer is us, the people. My detailed knowledge of economics is roughly the equivalent of a primary school pupil who has just mastered a "John and Janet" book, so it is a relief to see my opinions given intellectual weight by a very considerable expert, indeed.
The WSJ has recently published an essay by Arthur B. Laffer, he of the famous curve that I find infinitely more alluring than anything on a Hollywood starlet! (I have been pointed to his article by too many bloggers for me to 'hat tip' them all.) The essence of his belief (and my faith) is summed up, thus:
"And the government doesn't create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved."
In an American context he gives this chilling warning:
"If you don't believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what they'll do with Wall Street."
"Twenty-five years down the line, what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932. Whenever people make decisions when they are panicked, the consequences are rarely pretty. We are now witnessing the end of prosperity."
Alas for poor America with McCain and Obama as their only options, but I cannot spare too many tears when I view with trepidation the huge accretion of power by the utterly useless, bumbling, bullying, deceitful, psychotic, power-mad, nail-biting, nose-picking Jock who now runs more of my country than even Clement Attlee dreamed of! I turn in terror to the Tories - only to see more of the same. A bunch of Old Etonian twits caught like rabbits in the headlights without any philosophy to guide them beyond what I might call, with justification, 'Blairism', which can be summed up, thus: there is only one aim in our political vision, and that aim is to keep us in the top jobs for as long as possible.
In the circs, I have only one thing to say . . .
HEEEEEEEEEEEEEEEEEEEEEEEELP!
(*) You write 'straitened' I write 'straightened', let's call the whole thing off! I am obliged to Andy M, see comments below, for straightening me up - again! (Take a hundred lines, Duff!)
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