Sunday, December 28, 2008

First, do no harm

Jennifer Rubin on Obama's New New Deal:
The Obama transition team, soon to be the Obama administration, is concocting a reenactment of the New Deal.
A trillion dollar stimulus is going to "create" jobs, and the government will "bailout" failing industries (with additional debt funded by the Chinese, so long as they have an appetite for quickly depreciating dollars). If you think this sounds half-baked and suffers from historical amnesia, you are right.
Despite the obvious shortcomings with this approach (e.g., it's never worked before), the Republican Party so far isn't doing a very good job of coming up with alternatives. Plainly, they don't like the mounds of debt. And they are skeptical of a gigantic public works projects. But what could be done instead?
What about doing nothing? It seems to me that the "do something" demand for economic intervention is fundamentally misguided. We are experiencing the downside of the business cycle which, however painful, is certainly temporary. In its stimulus-and-buyout frenzy over the past several months, the federal government has already made extraordinary interventions. What Obama proposes is essentially more (much more) of the same.

Isn't the true conservative response to say that the federal government has already done too much, and that doing more will only compound the problem? If the problem is too much intervention -- and cutting the prime rate from 6.5 percent in July 2000 to 1 percent in October 2003 can be characterized as an intervention deeply implicated in our current woes -- then less intervention would seem a plausible solution.

The compelling urge to "do something" about the economy may be a political necessity for the incoming administration and the Democrats in Congress, but it does not follow that Republicans, a powerless minority in Congress with no meaningful influence in the Obama administration, must offer "do something" counter-proposals. Republicans could without political peril respond to Obama's New New Deal with a simple three-word message: "It won't work."

(Cross-posted at AmSpecBlog.)


  1. Sometimes, "doing nothing" is actually "doing something." and it's most often the most difficult decision of action.

    Doing nothing, if it accomplishes something, is the same thing as doing something, only harder to explain as an action in and of itself.

    Clausewitz described it in the strategic sense as "the act of self destruction for success."

  2. Had President Bush simply let the market forces work, we would not have had a so-called $700,000,000,000 bailout/rescue of the banking financial services industry. We would not have had a ridiculous $17,000,000,000 bailout/rescue of the American auto industry. All this sets the stage for is MORE, not less, government intervention in the economy. Hope and change, baby! Hope and change!