Epic fail of control freak government

Robert Tracinski:

Robert Samuelson recently described the current economic upheaval as "the crisis of the old order," a collapse of the economic dogmas and institutions of the past few decades. I was particularly struck by one of the items he lists as the pillars of the old order, "faith in routine economic expansion." Except that this doesn't describe what he's really talking about. What he's actually talking about is faith that government officials can manage and control economic growth. "Economists exaggerated their understanding and control. They seem to have exhausted conventional policy approaches." Specifically, he points out that the usual theories of monetary and fiscal "stimulus" have failed. "Central banks such as the Federal Reserve have held interest rates low. Budget deficits are high." Yet here we are.

If anything, Samuelson's summary is understated. Mohamed El-Erian puts it in more alarming terms.

I don't know about you, but whenever I am in an airplane experiencing turbulence, I draw comfort from the belief that the pilots sitting behind the cockpit's closed door know what to do. I would feel very differently if, through an open door, I observed pilots who were frustrated at the poor responsiveness of the plane's controls, arguing about their next step, and getting no help whatsoever from the operator's manuals.
So it is unsettling that policymakers in many Western economies today resemble the second group of pilots.

Ben Bernanke printed massive sums of money and pumped it into the economy, and when that didn't work, he printed more money and pumped it into the economy, heedless of the inflationary risk. He's beginning to look like an incompetent car mechanic: he jams his foot on the accelerator and nothing happens, so instead of taking his foot off the gas, he just keeps it jammed there, guaranteeing that when the engine does spring back to life the car will lurch forward uncontrollably.

Similarly, Obama's economic advisors assumed that the fiscal stimulus would produce the neat little "multiplier" they learned in their Keynesian economics textbooks, so that spending $800 billion would automatically lead to at least $400 billion in new, additional economic activity, an amount that ought to have guaranteed a decent year of growth in 2010. But the multiplier didn't multiply, the growth never happened, and now the ratings agencies are demanding that the US replace this stimulus with contraction, cutting trillions of dollars in future spending to compensate for the money squandered on the stimulus.

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There is more.

Obama has offered ample evidence for the failure of liberalism. Many have noticed, but true believers like Obama are hard to persuade, even when confronted by the facts. It is going to take a change at the top to change direction.