Though he fails to connect the dots, Fareed Zakaria unintentionally gives a strong shout out to capitalism. He notes that businesses are sitting on capital, rather than investing it in expansion and job creation, and that is hurting the economy. (Though he only mentions big businesses, small businesses likely would be hording even more capital, because they are less able to withstand government competition and Government-caused turbulence). In fact, businesses are sitting on lots of capital – which could be going toward creating lots of jobs.
Zakaria recognizes that this capital could create jobs which would pull us out of the recession. He recognizes that a key reason businesses are sitting on capital is politics; the Administration is causing uncertainty surrounding regulations and taxes. No smart business owner (which means about any business owner still in business) wants to compete against the Government or pull out in front of a governmental lurch. So, businesses wait, and the economy continues to slip. As I’ve blogged many times in the past, that is a very accurate description of what is going on. Gold star for Fareed!
So, okay, if governmentalism is crippling job growth, what does Zakaria suggest? Well, he starts to slide off the rails, when he notes that the reluctance of businesses to invest presents a strong case for another stimulus. The engine goes off the rails, when he states that Government spending is keeping the economy afloat. And all the cars end up tumbling across the countryside, when he suggests that the Administration “needs to outline a growth and competitiveness agenda.”
Fareed, my man, learn from your own wisdom. Businesses aren’t waiting for Government to redistribute more money. And, as you pointed out, Government spending isn’t propping up anything (other than unions and public sector jobs); rather, Government spending is pushing private capital off the table and under the mattress. Fareed, remember in the first paragraph, when you wrote, “Actually, there is a second stimulus that could have a dramatic effect on the economy — even more so than government spending. And it won’t add to the deficit.”? You were talking about private capital and how it was being scared away by Governmentism. Remember when you wrote about the CEO who said, “”Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about what’s in store for us for the future.” And, remember when you wrote that all those CEOs don’t think the Administration has sufficient private-sector experience or that it much cares for the private sector?
Why, then, do you poke yourself in the eye, by concluding that the administration needs to come up with a “growth and competitiveness agenda.” Did any of the business types you talked with say that they want the Administration to come up with a “growth and competitiveness agenda” — even though, as you report, those Obama voters now “all” think President Obama is “at his core, anti-business”? Or, did they say they need an end to the uncertainty caused by Government’s spasms of spending, regulations and taxes? It was the latter, wasn’t it? So, they’re not waiting for an “anti-business” Administration, (your words), to launch any agenda; they’re simply waiting for the Government to stop its ridiculous spending and public sector fertilization.
Just like we (should have) learned with FDR, Government programs grow Government, not the economy. ObamaCare, Cap and Trade, Wall Street handouts, etc., etc., grow Government, not the economy. The last thing this economy needs is for this Administration to come up with yet another agenda. Its plate is full with things it is not handling terribly well — 2 wars, the BP oil spill, border security, relations with allies, respect/fear by our enemies, etc. Those are all items where, with focus and attention, the Administration could improve matters and, thereby, reduce economic uncertainty. By contrast, the more it dabbles with the economy, the more the Administration creates uncertainty and, as a result, prolongs the recession by chasing away capital investment.
UPDATE (7/6/10): Aargh! David Brooks plays it perfectly, but then trips walking off stage. Brooks brilliantly points out that increased Government spending, rather than inspiring confidence, is undercutting confidence and private investment.
He masterfully states:
These days, debt-fueled government spending doesn’t increase confidence. It destroys it. Only 6 percent of Americans believe the last stimulus created jobs, according to a New York Times/CBS News survey. Consumers are recovering from a debt-fueled bubble and have a moral aversion to more debt.
You can’t read models, but you do talk to entrepreneurs in Racine and Yakima. Higher deficits will make them more insecure and more risk-averse, not less. They’re afraid of a fiscal crisis. They’re afraid of future tax increases. They don’t believe government-stimulated growth is real and lasting. Maybe they are wrong to feel this way, but they do. And they are the ones who invest and hire, not the theorists.
Bravo! The crescendo: “Spending now creates debt forever and ever.” Go, David, go. Bring it home!
The climax: “Spending now creates debt forever and ever.” Yes! Brilliant! Now, bow, and walk off stage.
The stumble: “So you have your doubts, but you are practical. You want to do something.” Oh, crap.
The flop: “[Y]ou need to mitigate the pain caused by the state governments that are slashing spending. You need a program modeled on Race to the Top. You will provide federal money now to states that pass responsible long-term budget plans that will reduce spending and pension commitments.”
David. Why? (Well, in fairness, he told us why: “You want to do something.” Anything.). Have you missed the barrage of articles about the next fiscal tsunami, David? Many states are a fiscal wreck. Some already are asking for federal bailouts. Other than the fact that the Feds print the stuff, why exactly is it that a federal government that is way upside down should shovel more money to states? States have budgets; they have tax bases; they have elected officials. They can figure it out — if they aren’t saddled with “unprecedented” burdens, like ObamaCare and Cap and Trade. “[S]tates that pass responsible long-term budget plans that will reduce spending and pension commitments,” as you put it, can handle themselves — much better than the federal government can handle itself, as a matter of fact. Let them.
David, responsible states don’t need a drunk uncle handing out bills (that he stole from someone else). And, irresponsible states shouldn’t be further enabled by the artificial economy of another federal stimulus. Like most media who report on Government, you are a Governmentalist. You just can’t help it. Though you brilliantly argue why Government should stop with its silly notion that it can build the economy, you can’t resist resting on your crutch: Government ’s gotta do something. Anything.
Government has done plenty, David. You wrote it yourself: “It is certainly true that the fiscal spigots have been wide open.” Government now needs to start turning off the spigots. That, as you wrote, will inspire confidence.
Capitalism and Governmentalism
Though he fails to connect the dots, Fareed Zakaria unintentionally gives a strong shout out to capitalism. He notes that businesses are sitting on capital, rather than investing it in expansion and job creation, and that is hurting the economy. (Though he only mentions big businesses, small businesses likely would be hording even more capital, because they are less able to withstand government competition and Government-caused turbulence). In fact, businesses are sitting on lots of capital – which could be going toward creating lots of jobs.
Zakaria recognizes that this capital could create jobs which would pull us out of the recession. He recognizes that a key reason businesses are sitting on capital is politics; the Administration is causing uncertainty surrounding regulations and taxes. No smart business owner (which means about any business owner still in business) wants to compete against the Government or pull out in front of a governmental lurch. So, businesses wait, and the economy continues to slip. As I’ve blogged many times in the past, that is a very accurate description of what is going on. Gold star for Fareed!
So, okay, if governmentalism is crippling job growth, what does Zakaria suggest? Well, he starts to slide off the rails, when he notes that the reluctance of businesses to invest presents a strong case for another stimulus. The engine goes off the rails, when he states that Government spending is keeping the economy afloat. And all the cars end up tumbling across the countryside, when he suggests that the Administration “needs to outline a growth and competitiveness agenda.”
Fareed, my man, learn from your own wisdom. Businesses aren’t waiting for Government to redistribute more money. And, as you pointed out, Government spending isn’t propping up anything (other than unions and public sector jobs); rather, Government spending is pushing private capital off the table and under the mattress. Fareed, remember in the first paragraph, when you wrote, “Actually, there is a second stimulus that could have a dramatic effect on the economy — even more so than government spending. And it won’t add to the deficit.”? You were talking about private capital and how it was being scared away by Governmentism. Remember when you wrote about the CEO who said, “”Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about what’s in store for us for the future.” And, remember when you wrote that all those CEOs don’t think the Administration has sufficient private-sector experience or that it much cares for the private sector?
Why, then, do you poke yourself in the eye, by concluding that the administration needs to come up with a “growth and competitiveness agenda.” Did any of the business types you talked with say that they want the Administration to come up with a “growth and competitiveness agenda” — even though, as you report, those Obama voters now “all” think President Obama is “at his core, anti-business”? Or, did they say they need an end to the uncertainty caused by Government’s spasms of spending, regulations and taxes? It was the latter, wasn’t it? So, they’re not waiting for an “anti-business” Administration, (your words), to launch any agenda; they’re simply waiting for the Government to stop its ridiculous spending and public sector fertilization.
Just like we (should have) learned with FDR, Government programs grow Government, not the economy. ObamaCare, Cap and Trade, Wall Street handouts, etc., etc., grow Government, not the economy. The last thing this economy needs is for this Administration to come up with yet another agenda. Its plate is full with things it is not handling terribly well — 2 wars, the BP oil spill, border security, relations with allies, respect/fear by our enemies, etc. Those are all items where, with focus and attention, the Administration could improve matters and, thereby, reduce economic uncertainty. By contrast, the more it dabbles with the economy, the more the Administration creates uncertainty and, as a result, prolongs the recession by chasing away capital investment.
UPDATE (7/6/10): Aargh! David Brooks plays it perfectly, but then trips walking off stage. Brooks brilliantly points out that increased Government spending, rather than inspiring confidence, is undercutting confidence and private investment.
He masterfully states:
These days, debt-fueled government spending doesn’t increase confidence. It destroys it. Only 6 percent of Americans believe the last stimulus created jobs, according to a New York Times/CBS News survey. Consumers are recovering from a debt-fueled bubble and have a moral aversion to more debt.
You can’t read models, but you do talk to entrepreneurs in Racine and Yakima. Higher deficits will make them more insecure and more risk-averse, not less. They’re afraid of a fiscal crisis. They’re afraid of future tax increases. They don’t believe government-stimulated growth is real and lasting. Maybe they are wrong to feel this way, but they do. And they are the ones who invest and hire, not the theorists.
Bravo! The crescendo: “Spending now creates debt forever and ever.” Go, David, go. Bring it home!
The climax: “Spending now creates debt forever and ever.” Yes! Brilliant! Now, bow, and walk off stage.
The stumble: “So you have your doubts, but you are practical. You want to do something.” Oh, crap.
The flop: “[Y]ou need to mitigate the pain caused by the state governments that are slashing spending. You need a program modeled on Race to the Top. You will provide federal money now to states that pass responsible long-term budget plans that will reduce spending and pension commitments.”
David. Why? (Well, in fairness, he told us why: “You want to do something.” Anything.). Have you missed the barrage of articles about the next fiscal tsunami, David? Many states are a fiscal wreck. Some already are asking for federal bailouts. Other than the fact that the Feds print the stuff, why exactly is it that a federal government that is way upside down should shovel more money to states? States have budgets; they have tax bases; they have elected officials. They can figure it out — if they aren’t saddled with “unprecedented” burdens, like ObamaCare and Cap and Trade. “[S]tates that pass responsible long-term budget plans that will reduce spending and pension commitments,” as you put it, can handle themselves — much better than the federal government can handle itself, as a matter of fact. Let them.
David, responsible states don’t need a drunk uncle handing out bills (that he stole from someone else). And, irresponsible states shouldn’t be further enabled by the artificial economy of another federal stimulus. Like most media who report on Government, you are a Governmentalist. You just can’t help it. Though you brilliantly argue why Government should stop with its silly notion that it can build the economy, you can’t resist resting on your crutch: Government ’s gotta do something. Anything.
Government has done plenty, David. You wrote it yourself: “It is certainly true that the fiscal spigots have been wide open.” Government now needs to start turning off the spigots. That, as you wrote, will inspire confidence.
Our discussion