Monday, November 24, 2008

What Year Is It

in your world?

According to Jonah Goldberg, the geniuses and mere honorees who think they are geniuses on the left are now changing their tune. Instead of calling for a new New Deal now that evidence is piling up that it made the Great Depression worse instead of better, they're saying we need another World War II.

There are at least two problems with that line of thinking.

First, World War II was caused by Hitler's ascent, which was caused by -- wait for it -- The Great Depression. If we're in an economic crisis of that magnitude, then a solution will present itself forthwith.

Or, if we listen to those who say that terrorist Islamicism is caused by economic conditions in the Middle East, perhaps a solution already has presented itself in the form of commercial jets colliding with New York skyscrapers.

Secondly, doesn't the left constantly complain about the amount of money spent on the war in Iraq? Or perhaps the problem is merely that they didn't get the money.

Just because a solution presented itself for the Great Depression, that doesn't mean it was the only possible solution, or that a solution would require government action. We had an economy before the Depression, and it's quite possible that we could have had an economy again without resorting to all-out war.

Simulating a war, as implied by a WWII without the fighting, implies that we don't have an enemy worth fighting right now.

Finally, the point I set out to make: the conditions now are not the same as in 1929, nor even 1941. We lack excess capacity of resources such as oil and steel. The resources we have are largely tied up productively, except where environmental laws keep them out of production. In particular, many of the "green" technologies the left hopes to create will require recycling items that currently have value, destroying that value (taking it out of the economy).

For example, if the government forces everyone to use electric vehicles, or if it becomes prohibitively expensive to operate or maintain them, that will mean that a lot of value on consumer balance sheets will simply disappear.

The economy is not as bad as the news says it is. We're in a healthy cycle of renewal, in which some people are finding that they lose money, or that their investments in 401Ks and houses aren't worth as much for a while. It's normal, and no government action is needed.

But the action we're going to get -- these huge bailouts and economic "stimulus" packages -- are going to deepen the crisis of confidence into a really bad time.

And now that Obama has been elected, there doesn't appear to be anything anyone can do about it.

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