It should finally have dawned on the American people that the politicians who presume to guide the economy have no bloody idea what they’re doing. We’re long past the time when knowledge of economics was required to see that the government is impotent when it comes to creating economic recovery. If you want evidence of that impotence, just look around.
Governments are very good at creating recessions and at impeding recovery. That is the limit of their powers. If you expect something constructive, you’ll be disappointed. Politicians from President Obama on down will promise the moon, but they will deliver only worthless rocks. They will blame everything and everyone for their failures, but their inability to succeed has one source only: the political process — which is founded on force, not peaceful economic cooperation — is singularly inappropriate for creating prosperity.
Between them, Obama and former president George W. Bush directed over a trillion dollars in spending increases and tax cuts toward stimulating the economy. What’s to show for it? A persistent and understated 8.2 percent unemployment rate. If you count the part-time workers who’d rather be full-time, the rate is 14.8 percent. Even that statistic hides a woefully depressed labor-participation rate: under 64 percent. You have to go back to 1981 to find such a low rate. The irony is that people who drop out of the work force in frustration aren’t counted among the unemployed.
The politicians’ approach is flawed at its most basic level. Almost without exception, they promise to “get the economy moving,” as though it were a stalled vehicle. Popular metaphors aside, the economy is not machinery subject to stimulus. It is motivated people engaging in continuous exchanges for mutual benefit.
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Sheldon Richman (photo)