Bipartisan Disaster

Once again Thomas Sowell explains the essential problem:

Too many people who argue that there is a beneficial role for the government to play in the economy glide swiftly from that to the conclusion that the government will in fact confine itself to playing such a role.

The government, having created the credit bubble, is furiously trying to keep it inflated. A decrease in credit leads to a decrease in employment. Politicians on both sides often define success by the number of jobs created while they were in office. The President-Elects latest plan to create 2.5 million jobs is a good example. Will the "H" for Hussein, in time, come to stand for Hoover?

Despite a myth that Herbert Hoover was a “do nothing” president, he was the first President of the United States to step in to try to put the economy back on track.

Herbert Hoover did what Barack Obama is proposing to do. Hoover raised taxes on high-income people and put restrictions on international trade, in order to try to save American jobs. It didn’t work then and it is not likely to work now.

Economic expansions and contractions have a long and complicated history in our country. The first financial panic dates back to 1788. There were many during colonial times. Government attempts to promote growth and soften the landings only serve to exacerbate the original problems.

The merger of commercial banks, home loan banks, and insurance companies are the root cause of the current dilemma. The pro-growth policies and home ownership mania combined to create the credit bubble. I haven't seen anything yet from anyone in Washington about easy credit being the problem.