Sunday, March 29, 2009

Attack From the Left: Paul Krugman's Poison Pen

In this Newsweek article Obama's Nobel Headache, Evan Thomas asks "What if President Obama is squandering his only chance to step in and nationalize—well, maybe not nationalize, that loaded word—but restructure the banks before they collapse altogether?"

Which leads me to ask "What if President Obama and congress would butt the hell out and let We the People work it out?" Who says the government is supposed to fix any of this? The controversy underscores the fact that obviously no single individual -- or group of individuals -- knows what to do. The free market has the best chance to react the most quickly. It has a built-in natural feedback mechanism that the government does not.

I am an engineer by trade, and I understand inverse feedback. Systems that lack inverse feedback, or have improperly designed inverse feedback are usually inherently unstable. Government programs suffer from both shortcomings in spades. Note that automatic stabilizers are not the same as what I am referring to in the free market. I am talking about Adam Smith's "invisible hand", as well as concepts by Milton Friedman and many others.

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