Do Any Of Them Know What To Do...???

It was Alan Greenspan, the Maestro who led America as the most powerful man on the globe, who said in the twilight of his days before Congress, that his forty year understanding of economics was faulty. Need anything else be said?

Do President Elect Obama's financial advisors including Warren Buffet, Robert Reuben, and Paul Volcker have any greater clarity concerning the great American economy? What about Bernanke or Paulson?

Earily so, the answer is no. The omnicscient masters of economics remain muted about the exact solution for deep recession or depression type scenarios.

No unfolding economy is so frightening to a central banker or politician than an economy slipping into deflation or depression. Peope stop spending. They hoarde. Prices decline swiftly. Employers cut hours, jobs, and shut down factories.

In the 1930's, this meant breadlines, Hoover Hotels, and selling eggs to make ends meat. In 2009, this means Blockbuster, McDonalds, and used cars instead of cinemas, Ruth's Steakhouse, and brand new sports cars.

Listenting to Warren Buffet's "economic Pearl Harbor" comments and Paul Krugman's doom and gloom rhetoric, one might think the "Great Mother of all Recessions" is upon us. Is America in such deep trouble that President Elect Obama should ominously report that "government is the only solution" and that failure to pass his 1 trillion dollar stimulus plan is akin to destroying the American economy?

Let it be said clearly. Bad public policy of the 1930's of hiking taxes, errecting tariffs, and contracting access to credit were the death knell of economic recovery for 12 years. Every conceivable big government program that could be invented was employed. FDR said, "Do something. And when you have done that something, if it works, do it some more. And if it does not work, then do something else."

On second thought instead of just doing something, doing something right such as employing capital friendly policies would have been far more effective than relying on the gimcrack populist policies to pull people out of recession in the 1930's? Had Morgenthau or FDR not strong-armed capitalists, business owners, entreprenuers, with excesssive government regulation including wage and price controls, capital and labor would have readjusted more efficiently and effectively to recession than with centralized planning of the 1930's. Even Morgenthau lamented years later that enormous spending and government expansion simply didn't work.

So what have we learned today? Maybe not very much. Secretary Paulson said, "We have to do something."

Six-hundred dollars to each American in 2007 to rev up the economy...A $350 billion housing plan to save housing....Bear Stearns bailout in March 2008...Citigroup, AIG, TARP I, TARP II to follow in 2008....TALF....Stiumulus I of 2009 in the amount of $789 billion, Stimulus II on the horizon...auto companies, insurance companies, etc...bailed out of insolvency.

Bail outs have wiffed. Markets have tanked. Confidence is waning. Obama's "Change that you can believe in" rhetoric is fast becoming fizzled soda.

President Obama, Geithner, and Summers promised that help was on its way. More spending, massive government invervention, greater regulation, and increased legislation was their intention. Such medicine which they offer as a cure will be worse than the disease of 2009's recession.

To what is President Obama beholden? Is it economic recovery for all citizens? Or is the President so entranced by the social re-engineering experiment to equalize outcomes in America, that nothing shall stand in his way?

Indeed, the beguiling of the people has taken root. The "Shining City Upon a Hill" which has endured the wacky ages of FDR and LBJ, shall once again require the citizens to reclaim their liberty when the damage is done.