The Shotgun Blog
Wednesday, January 28, 2009
The Do-Nothing-Crowd: What should government do to fix the economy? What it should do about all sorts of problems. Nothing.
The Stephen Harper-led Tories released details about their absolutely disastrous and anti-conservative budget yesterday. Honest and forthright small government supporters (read: libertarians and fiscal conservatives) are up in arms and calling a fraud a fraud.
But all these small government supporters don't appear to be offering much of a solution to the problems. What would they have the government do? What particular steps should the government take?
Phrasing the question like that already stacks the deck against the small government supporters. If you ask what Jones should do to fix the plumbing, you're already assuming that Jones should be busy doing something. Maybe Jones shouldn't be doing anything. Maybe the right questions are: Is this a problem that Jones can actually fix? Will Jones taking action alleviate the problems, or just make them worse?
And the same might be true of the government. Maybe, just maybe, instead of "doing something," the government should "do nothing."
In steps Politico with what promises to be an exciting series of articles on what they're calling the Do-Nothing-Crowd -- the dissident economists, pundits, and policy experts who insist that the government should not get itself in a tizzy and throw its elbows around in the market. It should keep its elbows to itself. It should do nothing.
Most of Washington has reached quick consensus: Government must do something big to shock the economy, and it should cost between $800 billion and $900 billion.
But dissident economists and investment professionals offer a much different take: Most of Washington is dead wrong.
Instead of fighting over what should go in the economic stimulus bill, pitting infrastructure spending against tax cuts and contractors against contraceptives, they say lawmakers should be fighting against the very idea of any economic stimulus at all. Call them the Do-Nothing Crowd.
“The economy was too big. It was all phantom wealth borrowed from abroad,” says Andrew Schiff, an investment consultant at Euro Pacific Capital and a card-carrying member of the stand-tall-against-the-stimulus lobby. “All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place.”
Washington has a habit of passing legislation in a crisis and suffering from morning-after regrets — the Iraq war, the Patriot Act and last year’s original bank bailout plan come to mind. So we thought it would be wise to air the views of the naysayers toward Washington’s latest consensus approach.
Read the rest, and stay tuned. We'll be following this series closely.
Count me in the Do-Nothing-Crowd.
Posted by: TM | 2009-01-28 10:14:59 AM
Posted by: Herman | 2009-01-28 12:05:54 PM
Doing nothing isn't enough. We have to undue decades of institutionalized government interference. The "shovel ready" projects I want to see are the ones that bury the state.
Posted by: Grant Brown | 2009-01-28 1:00:39 PM
“The economy was too big. It was all phantom wealth borrowed from abroad,” says Andrew Schiff, an investment consultant at Euro Pacific Capital and a card-carrying member of the stand-tall-against-the-stimulus lobby.
Posted by P.M. Jaworski on January 28, 2009
Andrew Schiff and his brother Peter, who run Euro Pacific Capital, are made out by this blog to be the only sane people left in the investment world. The Schiff brothers claim that they saw the financial meltdown coming. Unfortunately they didn't see it coming soon enough as Euro Pacific Capital asset value was down almost 70% in 2008. With the exception of getting out of US financial instruments they were wrong everywhere else.
Posted by: The Stig | 2009-01-28 1:08:32 PM
Nothing and then some.
Posted by: JC | 2009-01-28 3:47:33 PM
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