Why do things stink so much?

Congress and President Obama since his election in 2008 made the main mistakes after the crisis hit. Instead of concentrating mainly on fighting the recession and promoting faster economic growth, the Congress elected in 2008 believed they had a mandate to radically remake the American economy. Aside from repeated attacks on American business, especially banks-some of them deserved- they not only passed various stimulus packages (that did not stimulate much), but also tried to promote a vast legislative program that had nothing to do with fighting the recession. This program was aimed at reengineering the American economy. It included radical changes in the health care system, proposed taxes on carbon emissions by companies, much larger subsidies to alternative sources of energy, such as wind power, proposals to raise taxes on higher income individuals and on corporate profits, and to raise the taxes on capital gains and corporate dividends. It also includes a movement to make anti-trust laws less pro-consumer and more protective of competitors from aggressive and innovative companies. It has as its centerpiece a financial reform bill that was a complicated and a politically driven mixture of sensible reforms, and senseless changes that had little to do with stabilizing the financial architecture, or correcting what was defective in prior regulations.

That's what seemed to me to be happening too. It was as if the vandals that we inadvertently elected sought to take advantage of a wounded country to attack it while it was defenseless, kick it while it was down. They perhaps thought that they were improving the country by hacking off its limbs and damaging its sensory organs, though that doesn't say anything complimentary about their idea of improvement.

Smart people would have assessed the situation and moved first to get the country back on its feet before proceeding with their desire to cripple it. It would have been harder to do such grave harm to a country in better shape, but they just seem like cruel bullies now. Their incompetence looks like meanness and stupidity.

Government spending rose a lot during the last year of the Bush administration, and rose even more so during the year and one half of the Obama administration. Instead of introducing additional stimulus packages and further raising the cost of doing business, Congress and the President should try to create an environment where companies, both large and small, and entrepreneurs are recognized as crucial forces in a dynamic economy. Their activities can help the American economy not only grow out of the economic slowdown, but also raise its economic growth in the future that will greatly improve the well being of future generations, and help meet a dangerous future debt burden.

Obviously. The government isn't about the government, it's about the rest of society. Our institutions have been hijacked by the bureaucrats hired and elected to staff them. They have abandoned the missions of those institutions to serve society, and adopted the new mission of serving themselves. The education system serves teachers and administrators rather than students, the national government seeks only to enrich its elected and appointed staff, and reward its important supporters.

Apart from the fact that this is vile behavior it can't be continued without collapse.

Update: As an idea, neo-Keynesianism is dead. (As public policy, of course, it will live forever.)

When the credit unwind started, the papers, the TV and the newsweaklies declared capitalism dead in just a little less time than it took for Kent Brockman to declare his loyalty to the Space Ants. Less than two years later, you can't buy good press for the stimulus; the economy is frozen solid in August; the nation is rediscovering -- despite the herniated efforts of local, state and federal government -- the virtues of thrift; and if you search for Keynes on the interwebs, all you turn up are headlines like "How Dr. Keynes killed the patient." . . .

With only two years’ distance the TARP and the ARRA stimulus (and all the already forgotten lesser stimuli like the $400 billion Federal Housing Finance Regulatory Reform Act of June 2008) can be seen as one of the great public tragedies of our time.

Update: Pauly Krugnuts.

“Things have gotten so slow that Wall Street traders are giving up coke for pot. Note that, according to the White House itself, we have already enjoyed most of the benefits of the $787 billion ARRA Stimulus. These benefits seem to have consisted of making signs to tell people about the stimulus.”