Flaherty resurrects Keynesian PR stunts to deal with the economy
December 8, 2008 · By Charles Anthony
When all else fails, pull out the pathetic old Keynesian treatment plan: spend, spend and spend! Build roads and bridges and trains! Dig holes! Fill holes! Re-dig holes! Re-fill holes!
Are politicians ever going to learn? Is the public ever going to learn? The money has to come from somewhere. You have to wonder, if you can spend your way out of a recession, why wait until you are in a recession to spend on these projects?
These infrastructure plans are not meant to pull the economy out of a recession or out of the “economic crisis” as we now call it. We are only told that because, well, to make us feel good and because we want to believe it will work. We just refuse to accept inaction. With enough time, most Western countries pull themselves out of a recession anyway and so the public thinks the “stimulus” at least helped attenuate it — like the public would know the difference.
The only real solution to dealing with a recession is precisely for the government to do nothing. Regardless of what metric you want to use, the bottom line is that a recession is a massive mis-allocation of resources in an economy. Government intervention can only prolong such mal-investments by chosing winners and losers. We are seeing it unfold in the auto sector right before our very eyes. I wonder what mystery of the world must be uncovered to demonstrate that government bureaucrats are capable of determining the proper allocation of resources at a time when everybody else in the economy has failed to determine it themselves.
The sad truth is that the politicians are just pulling out Keynesian tools to placate the public. At best, these “stimulus” packages are bread and circuses. At worst, they are political opportunism to re-distribute wealth.
“When all else fails, pull out the pathetic old Keynesian treatment plan: spend, spend and spend! Build roads and bridges and trains! Dig holes! Fill holes! Re-dig holes! Re-fill holes!”
Are you really that surprised? I guess you can thank the Opposition parties for that.
They insisted that the Government “make work” and “provide stimulus” without having had the benefit of cost-to-return analysis. No, it’s far more important to throw money at a problem so that it looks like you’re doing something, and then spend more money to fix any mistakes/wrong directions and thus create “more” jobs and look like you’re doing “more” but have actually accomplished very little other than spending money irresponsibly.
I don’t have a problem investing in infrastructure; where it’s needed and where it will do the most good. What I have a problem with is being forced to spend blindly, as the Opposition Parties appear to be promoting. It’s irresponsible and it’s reckless abandon with taxpayer money.
What I’m afraid of is that the Opposition Parties are trying to force the Government into making the situation worse so that they end up with “egg on their face”; and that they do this knowingly. And should the Government try to prevent that kind of manipulation from happening (for the good of the country), they will be punished for it by being “defeated”.
I agree Sean. There is a fine line between investing in infrastructure which is much-needed and throwing money at projects just to appease the whining and crying from the left.
Thanks Sean. You have taken this issue up a notch. There is not enough close examination of government policy, in my opinion.
I am really cynical about government interventions but it never occurred to me that the opposition parties would act just to make the government look bad. That would be very devilish of them but you could certainly be right.
You’re very welcome Charles. Given the current climate on The Hill, it wouldn’t surprise me at all if the Opposition Parties were actively trying to push the Conservatives into a no-win position.
The first unfortunate part of that possibility is that we, the voters, will not come to see and understand this until after the fact and the country is in shambles because of it.
The second unfortunate part of it is that the media historically focuses primarily on those who “form government”, and only somewhat pheripherally on the Opposition. I doubt there are many journalists (and I’m afraid I have to use that term loosely), who would actually pursue that kind of investigation.
The third unfortunate part is the real kicker in my opinion. We are ourselves responsible for the previous two parts. As news consumers, we prefer the shallow headline grabbers and talking points to the deep currents of the political mainstream and where they may be leading. Because of that preference, the media are somewhat forced to oblige us in our tabloid obsessions and report on shallower and shallower issues.
However, there are those who look deeper into the waters to see what lies beneath. What I think I see there quite often disturbs me, and I find it difficult to see a way out of it.