1.5 Cheers
For Socialism!
By Rick Ackerman
For edition of December 09, 2008
Should investors hail President-elect Obama’s plan to create 2.5 million jobs as good news? Frankly, no. It is probably the worst news to hit Wall Street since 1935, when FDR created the Works Progress Administration with the stroke of a pen. Obama apparently intends to bring back Keynesian quackery full-bore, and with it a robust echo of Santayana’s warning: Those who cannot learn from history are doomed to repeat it.
We shudder to imagine how long WPA II will delay a genuine recovery -- one based, perforce, on strong capital investment, technological innovation, lower taxes and -- let’s not mince words here �' creative destruction. It took a World War to lift the U.S. economy from the 1930s Depression, but we’d prefer not to imagine what it might take to get us out of this one, especially if nanny state welfarism becomes the central theme of the Obama Administration, as appears likely.
That said, we don’t see any good alternatives, politically speaking. Nor do we think the sort of capitalism that has brought the world economy to the edge of disaster deserves a second chance. With America slipping into economic depression, we’d sooner take our chances with home-grown socialism, at least for a while, than with the kind of economic policies that lobbyists for the banks, manufacturers and big business would clamor to implement under duress. All have been corrupted beyond redemption anyway, so let them sink or swim. We will all have to endure quite a bit of economic pain before common sense is restored to the marketplace and the wisdom of Adam Smith once again holds sway in the nation’s business schools. A generation could pass before we are able to start up the banking business anew, presumably after driving a stake through the heart of the Federal Reserve.
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