Want to see a microcosm of everything that’s been wrong with American economic policy over the last couple of years? Watch this exchange between Ezra Klein and Rick Santelli from earlier today on MSNBC’s Morning Joe. Santelli, whose February 2009 on-air rant over fiscal and economic mismanagement inspired the start of the Tea Party, gets exasperated with Klein after the Washington Post columnist talks about money moving around “unfairly”:
The entire problem with this economy is the notion that some people have of “unfairness” in markets. In fact, that’s how we got here in the first place. Government intervened to correct what was seen as “unfairness” in the housing market by guaranteeing risky loans, which set off a housing bubble that left the economic system in ruins. We got Obamanomics as the end result of that, which is all about “fairness,” and which has utterly failed to produce growth thanks to the arbitrary and punitive ways it treats investors.
Furthermore, despite Klein’s citation of two authors he claims has done “the best work” on this crisis, Klein is advocating for a policy which has already failed. He wants the Fed to intervene by creating inflation, which is exactly what they did with their two rounds of quantitative easing. Not only has that failed to produce actual growth, as the latest GDP numbers show, it threatens to escalate a global debt crisis while weakening the value of assets for most Americans. The Fed has no more options to play.
We’re not seeing growth because of the hostile environment for investors, and a lack of consumer demand related to high unemployment. We could solve those tomorrow by reducing regulation (especially the arbitrary ObamaCare legislation that makes risk calculation nearly impossible), unfettering American energy exploration and extraction to create jobs and lower energy costs, and reform the tax system to put all investors on an even playing field and reduce the corporatism that drags down small-business creation and innovation. We don’t need social engineers tinkering with the economic system to achieve their notion of “fairness” — we need actual economic growth, which the social engineers have proven completely incompetent at delivering.