Wednesday, 03 November 2010

Blessed D.C. Gridlock

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Comments by the Associated Press following the midterm election sounded the alarm about gridlock. The AP writer warned: "A standoff between the Obama administration and emboldened Republicans will probably block any new help for an economy squeezed by slow growth and high unemployment. Congress might also create paralyzing uncertainty for investors and businesses by fighting over taxes, deficits, healthcare and financial regulation."

There are so many errors of fact and faulty assumptions and conclusions in that single statement that one scarcely knows where to begin. Standoff? The Obama administration has run roughshod not only over the Constitution but against a steadily increasing chorus of dissent from citizens complaining about unilateral decisions to bail out banks and auto companies, shoving unwanted and illegal healthcare legislation down their throats, ignoring illegal immigration, and pushing to raise taxes in order to redistribute the wealth. A standoff would be welcome.

[Such a standoff] would probably block any new help for [the] economy. What new help would that be, exactly? Would that be more intervention, more laws and regulations, more disincentives for businesses to invest, expand, and then hire? What exactly would the government do that hasnt already been tried and found wanting?

Congress might also create paralyzing uncertainty for investors and businesses. Would that be similar to the present paralyzing uncertainty that plagues investors and businesses because of the determined march of the Obama Progressives to socialize the economy?

Economists who have promoted the failed ideas and strategies of Keynesian doctrine now bemoan the possibility that new ideas and strategies and experiments might not be tried. Brian Gardner, an analyst for the financial firm Keefe, Bruyette & Woods, complained that We expect massive gridlock and little cooperation. A Yale University political scientist, Jacob Hacker, joined the lament: Very few believe the government should sit on its hands. But right now were facing a period of drift.

The AP article outlines the disasters that await: no additional spending to stimulate the economy. Obama's $50 billion plan to spend additional funds on roads, railways and airports is probably dead. And the 99-ers wont be getting any more unemployment benefits, either. Worse yet, ObamaCare might be repealed, and the new Congress is likely to try to scale back the overhaul of financial regulation. Analysts for Bank of America, a beneficiary of generous bailouts at the start of the Great Recession, warned that Short-term gridlock is very bad for the outlook. In today's challenging environment, inaction is dangerous.

In reality, according to Economic Collapse Blog, the unfortunate truth is that this election is not going to change much. Pointing out that most incumbents were reelected this week, the writer advised: [The] U. S. Congress does not run the economy and neither does the President.

The Federal Reserve controls the money supply. The Federal Reserve controls our interest rates. If the U. S. government wants [to spend] more money it has to go get it from the Federal Reserve.

During an interview on NBC's "Today" show, Kentucky Senator-elect Rand Paul pointed out that government gridlock is not necessarily a bad thing. He said that while people complain a lot about gridlock, the most fiscally conservative government is always [a] divided government.

Its the Constitutions deliberate design of the separation of powers that will slow if not halt altogether the federal government's rush to totalitarianism. Dividing the interests of the legislative, executive, and judicial branches was one of many such deliberate efforts by the Founders to check the power of government. By pitting one interest against another, the power of one branch would be checked by another. What happened this week is a perfect example of such a check.

As David Harsanyi, writing for the Denver Post, put it:

2012 portends to be a more consequential year, where either the country continues to trend in the direction of limited government ideals, or the massive bureaucratic institutions built in the past two years will be cemented for the long run.

No matter what happens, for now, we can look forward to two glorious years of hyper-partisan acrimonious gridlock: Washingtons most moral and productive state.

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