Denver Post editorial: Enough with the Keynesianism, already
posted at 3:00 pm on August 28, 2010 by Ed Morrissey
The Denver Post editorial board isn’t exactly known for its rock-ribbed conservatism, but today, they have joined the small-government bandwagon. The editorial calls for an end to Keynesian interventions that have clearly failed, and instead an effort to “restructure government to something we can afford.” In Colorado, that call may mean trouble for Democrats looking to return to Washington, as their leadership so far is offering nothing more than a double down on the very policies that the Post blasts in its editorial today:
It looks like the Keynesian theory of infusing massive amounts of government cash into the economy has fizzled. And while many other factors also explain the lack of economic energy, the bottom line is that nearly everyone — from consumers to business owners to government decision-makers — faces tremendous unknowns.
Worries about maintaining jobs and salaries stymie consumers. Businesses are holding back money. Economists also say that likely changes to tax laws and new regulatory environments are having a chilling effect.
And that uncertainty continues to hobble our consumer-generated economy.
The news is dire and the message — we hope — is simple: We need clear-eyed action going forward. Kicking around political footballs when there is a chance the country could slip back into recession cannot be tolerated.
The Keynesian theory has fizzled, indeed — just as it did when tried in the 1930s and again in the 1970s. Government seizure of capital for redistribution makes less efficient use of the capital than the market does, for all of the obvious reasons, and a few less obvious. Among the latter, private capital works more quickly; the Porkulus funds took far too long to have any impact, as critics warned when Congress and Barack Obama demanded almost $800 billion in borrowed money for it.
But it’s not just the Keynesianism that is causing the problem, and the Post strongly hints at the issue. Under Obama and a Democrat-controlled Congress, regulation has exploded, much of it ambiguous and arbitrary. ObamaCare is the biggest example; the bill contains numerous references to rules that “the Secretary shall determine,” leaving businesses without any firm path to plan for future expansion. Cap-and-trade and Card Check, which are still sitting on deck, will introduce not just higher costs but even more ambiguities and uncertainties into the mix, and the result will be capital flight, recession, and perhaps worse.
This election, the Post concludes, is a referendum on the economy. It should also be a referendum on federal arrogance and executive competence.