Proper View of the Economy

Stephanie Flanders put out this Post which is almost a Must-Read for the younger Generation. I will go with the old misquote: ‘It was the best of Times, it was the worst of Times.’ Recessions hold exactly as much opportunity as Booms, and a certain segment of the economy will be quite successful in a Recession, less so within a Boom. Another percentage of the Labor force will have an automatic rise in Pay, as their immediate Predecessor retires, and open up a high Income range for themselves. Some present a viable alternative to a failed or failing competitor, to their immense benefit. One has only to find what People need, and fulfill that Need; the rest becomes history with substantial Profits for the Provider. One should always study the markets, and adopt procedural behavior which maximizes economic success.

Arnold Kling expresses the same sentiment with this Post, where he basically states that the Past will never return identical as once was; new industry and business will replace older industry which has proved itself derelict. New Participants will direct new enterprise to fulfill new Needs, or older Needs never adequately covered. The World moves on, and failed Participants are left to reorganize. The only Question about the process We have to ask is How much We as an economy and society should aid in that reorganization of failed performance. I suspect that the Answer is no Aid at all, where Government action will always turn into impediment rather than help. There is something cruelly efficient in simply allowing the markets to grind and eat failure for whatever Nutrient value does exist.

David Leonhardt points out the misplacement of most stimulus in the first place, as stimulus becomes a political football in a Game where Everyone can play. All efforts becomes a process of picking up necessary Votes, and economic need gets lost in the scramble for personal positions. Stimulus became a Process to provide Funding for innumerable political programs previously left without funding, because of the lack of political support and the worthlessness of the social and economic impact. Now, We will be left with excessive Spending without Sunset, all determined by a minority of political sentiment. Only in America can Democracy be converted into a dictatorship of a polity of less than 5% of the Population; simply because an even more minute membership of the Court system states that the Government cannot renege on its Promises, even if those self-same Promises were extortion to gain support for some immediate Issue. One gets economic growth through Stimulus, but at what Price, and does it lead to long-range corruption of economic efficiency? lgl