Every generation of people that pass across the face of the Earth feel that they are different in some way from the past waves of humanity. The politician of today imagines they have tools to control the economy that they did not have in 1929. They imagine they can stave off bad economic symtoms and diseases using fiscal manipulations of their profligate spending and federal reserve policy. I imagine in 1929 they thought they were more sophisticated than in 1850 also.
Each generation thinks it invented music, sex and the stock market. With 100 percent certainty we are not different than previous generations. Only our technology has changed a bit. Thus is there any possibility that the stimulus bail out package will work?
The very fact that they are not able to predict economic problems indicates their understanding of the system is insufficient. When I understand a system I can predict its behavior. Our government is clueless. Thus our government is performing brain surgery with a 12 gauge gun. The current financial crisis is causing our government to attempt manipulations on a scale never seen. However large they may be they are not any different than things tried in the past. As Einstein said it does not take talent to make something bigger. When George Bush warned about "too much government in markets" he was correct. He could have used the old phrase "too many cooks in the kitchen" and made his point more effectively. The government is not only too many cooks but the wrong bad cook that likes to sprinkle arsenic in the soup.
We think we are different. Everybody in the past has thought the same thing. Its a natural human mode of thought. From this perspective it is almost certain the stimulus bail out package will not work. On the contrary it is likely to slow any improvement in conditions. In a set of conditions we are under the normal political response is guaranteed to be the wrong one. If history is a guide whatever the politicians do is going to be the wrong under this set of conditions.
After all is said and done SOMEONE has all the money that the companies needing bail outs lost. Should we not be following them? They made the correct moves. Instead we are subsidizing the losers. We are wiping the ledger clean for them. The distributed accounting ledger that is our money system will lose its memory if they dilute our currency sufficiently.
But politicians do what politicians do. They have responded reflexively. I imagine there is nothing that can be done. It appears to be unfolding unconsciously. Like a doppleganger zombie they shuffle. If they were the least bit awake their solutions would have a hint of creativity. I have spotted absolutely none.
In this situation we are better off doing nothing. Try telling a political zombie that.