Thursday, October 23, 2008

Obamanomics, Triumph of Hope Over Experience

An Obamanomics Preview -

As I've been saying for awhile, we are already in the "change". Democrats took over congress in '06, and they definitely promised a lot of change, now they just don't seem to be willing to admit that "they delivered".

Economic growth is pretty much 100% about people investing and working with the belief that they will be able to improve their lot in life by keeping a lot of the positive results of their investing and working, or suffering the consequences if they guess wrong and invest in or work at the "wrong things". When the government promises to allow them to keep less of the rewards of that investing and working, or worse yet indicates that BAD decisions in what mortgage to take out, bank to invest in, or work decisions will be REWARDED with bailouts, income credits, extra programs, etc, the net result tends to be that intelligent folks work less, invest less,  and sit on the sidelines and wait for government to "get the rules straight".

That would seem to be pretty much where we are now. The government is promising a bunch of rewards for those that have made poor decisions and a bunch of penalties for those that have made good decisions. Tax what you want less of, subsidize what you want more of; the rule is as old as mankind itself. So we are taxing folks that have selected good jobs, good investments, lived in their means, etc and we are subsidizing folks that have failed to find descent work, invest in anything and lived outside of their means. Gee, I wonder what decisions and actions we will get more of and which ones we will get less of?

The quote from this article that is obvious is:

If we may borrow a phrase, this is the triumph of hope over experience.
The one thing Washington hasn't failed to do in recent years is spend,...

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