Tuesday, December 23, 2008

Another depression due to government bailouts?

Thomas Sowell is one of the most astute economists in America, and has written a number of books that are well worth reading. In this piece, he shows that the massive unemployment of the depression in the 1930's occurred well after the stock market crash, as an apparent result of clumsy government attempts to "rescue" the economy. Further government efforts led to years of economic hardship.

Many of us can remember the "stagflation" of the 1970's, which was a result of more government "stimulus" efforts, and which caused immense economic pain, including 20% interest rates.

One definition of insanity is trying the same thing over and over, expecting to achieve a different result. We are now trying the same approach that has failed massively twice before in hopes of achieving a different result. The political class obviously hasn't learned from history, and is now in the process of repeating it.

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