June 29, 2011

IBD Rips (Not Really) Clueless Ben

Filed under: Economy,Taxes & Government — Tom @ 8:33 am

In a Tuesday editorial, Investors Business Daily explains to Ben Bernanke what anyone not blinded by ideology can see about why the economy is underperforming:

How Can The Fed Be So Clueless?

Federal Reserve Chairman Ben Bernanke says he’s puzzled by the failure of the economy to respond to our government’s many ministrations. Which explains much of why our economy is such a mess.

… We’ve spent the better part of three years with government making the most extraordinary interventions in the economy in our nation’s history.

Government spending, as a share of the economy, has soared 25%. Regulations, many of them arbitrary and foolish, such as the ban on incandescent light bulbs, have never been more numerous.

Businesses say in survey after survey that, with all the government’s micromanaging of the economy, they are uncertain of what comes next, and therefore are postponing investment and hiring decisions….

After reciting the well-known litany of failures and heavy-handed interventions, IBD cuts to the chase (bolds are mine):

Look at what’s transpiring in our markets. After repeated government intervention, no one today knows the real price of food, housing, energy, raw industrial goods, bonds or stocks (or medical care — Ed.). The amount of government money distorting these vital parts of our free economy is so great, our markets can’t really function.

Free prices set by buyers and sellers are the way free markets work. Free prices create efficiency. They send vital signals about what to produce — not to mention when and where and at what price.

Absent those price signals, which happen spontaneously between buyers and sellers, a free-market economy can’t work. That’s what’s happening today. And that’s why the USSR, with all of its grand five-year plans and thousands upon thousands of apparatchiks, couldn’t make its command economy fly.

A handful of bureaucrats can never set prices or allocate goods or decide what should be made as efficiently as millions of people acting in their own interest through a free and open market.

Our policymakers seem to have forgotten this. They make statements that indicate they don’t know the damage their policies are doing or they are willfully oblivious to them.

I vote for the last five bolded words, especially in regards to Bernanke. I believe that the Obama administration made it clear in no uncertain terms a year ago (evidence here, here, and here) that if the economy tanked, he would get smeared with the blame — even though, short of running the electronic printing presses at full speed, he had done everything he could with monetary policy in an attempt to offset God-awful fiscal policy. So, instead of standing up, he ran the printing presses.

Additionally, certain people in Washington are quite pleased with themselves at the damage they’re causing in the name of achieving their “progressive” nirvana. To believe this, all you need to do is look at what they were saying before they were given power.

Feigned ignorance is the last refuge of Gangster Government.

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