Tuesday, November 25, 2008

A Longer View On Today's Economic Situation

I can't imagine that there are many people out there arguing that these are the best of times, economically-speaking. However, all this talk comparing today to the Great Depression is just silly--today isn't even as bad as the 1970s. We may get there, but we're nowhere near there yet. Thomas Sowell gives us some comparative data:

Amid all the political and media hysteria, national output has declined by less than one-half of one percent. In fact, it may not have declined even that much-- or at all-- when the statistics are revised later, as they very often are.

We are not talking about the Great Depression, when output dropped by one-third and unemployment soared to 25 percent.

What we are talking about is a golden political opportunity for politicians to use the current financial crisis to fundamentally change an economy that has been successful for more than two centuries, so that politicians can henceforth micro-manage all sorts of businesses and play Robin Hood, taking from those who are not likely to vote for them and transferring part of their earnings to those who will vote for them.

And that, boys and girls, is what we call socialism, or perhaps even Marxism.


Ellen K said...

At this point, I am wondering what President Obama intends to do about the many middle class males that have lost jobs. They don't fit in any recognizable minority, they don't fulfill anyone's innate need to comfort and console, but there are far too many middle aged, middle class males losing jobs only to be replaced by college grads with no experience. We have had two murder suicides in the area in which unemployment played a role. I wonder how many more will occur before "change" reaches our neighborhood.

Coach Brown said...

It drives me nuts that few tend to really look at the economic numbers before they look at the issue of "Depression". Yes, unemployment is up....to 6.5%. Do we not remember that in the early 90's the rate was near 8%, or near 11% in the early/mid 80's? How about the fact that the GDP hasn't even dropped two consecutive quarters yet. That's the technical definition of a recession.

Obviously we are in tough economic times, but the "these are the worst times since the Great Depression" are very overblown. Yes, the financial industry is reforming (it should, it was allowed to get away with murder),and the housing market is getting hit. Well, with the inflated numbers, it should be.

And while I disagree that Marxism is on the horizon, I think that a more socialized economy is already here. The government is loaning (?) out hundreds of billions of dollars to industry without any real revenue growth. That money is coming from somewhere. We'll see how aligned with Democrats the American people are when the overall tax burden shifts to the Middle Class, because the current conditions aren't leaving much choice.