Barney Frank never met a government spending program he didn’t like, at least until now. While expressing his overall approval for the scope of Barack Obama’s stimulus proposal, Frank told NPR that it relies too much on tax cuts to stimulate the private sector and not enough on government confiscation of capital for redistribution by Washington elites.
Well, OK, he didn’t quite put it that baldly, but he came close:
House Financial Services Committee Chairman Barney Frank (D-Mass.) said Thursday that President-elect Obama’s stimulus plan spends too much money on tax cuts for his taste.
Frank said on NPR’s “Marketplace Morning Report” that he believes the spending package Obama supports will be large enough to help the ailing economy but that he does not entirely agree with how the money will be used.
“I have some difference because I think they may be doing too much tax-cutting and not enough direct spending from the standpoint of immediate job creation,” Frank said.
Yes, well, no one would ever accuse Frank of being an economic whiz. Taking capital out of the markets now to fund public-works projects that will take months or years to organize will not only not create jobs in the short term, it will actively damage the investment engine that will maintain the jobs we have now. Barack Obama appears to realize this, at least dimly, while Frank just remains dim.
For an explanation of how massive public-works programs fail to increase overall employment, Heritage Foundation has a clear explanation, via Ed Driscoll:
FDR had the same idea as Frank, which was the confiscation of capital from “the rich” and redistribution through public-works programs and welfare assistance. Not only did it not work the first time, but the second phase of the New Deal resulted in an increase in unemployment greater than the percentage of total unemployment today between 1937-8. Only the war put America back to work, primarily because millions of men who would otherwise have been in the workforce went into the military instead.
Government-controlled capital gets used in the most inefficient manner possible. We’re headed towards another several years of learning that lesson again. Too bad Frank and the rest of Congress didn’t learn the lesson of intervention from the self-inflicted debacle of the housing bubble.
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