What is government's record on economic intervention? Not good. When government decided it's good for more people to own homes, they began manipulating banks to loosen up on loans, so when unqualified buyers came to the real estate agent or builder with a pre-qualification, capital was directed toward real estate, and it became a giant bubble. At some point, agents and builders knew that something had to give, because they knew the people buying homes, and they knew they weren't really qualified, but what were they supposed to do -- not service them?
Now Washington is at it again, demanding transportation and infrastructure spending -- this is supposed to create employment and keep us competitive with China and India. Perhaps there are roads and bridges that need to be built, but what will happen is that when the money hits the streets it'll be misdirected and much of it'll be wasted. How do I know this? It has happened over and over. First, we aren't a developing country with a billion people, so trying to do what China is doing is ridiculous. Secondly, The US is not in competition with China except in the minds of statists who see the economy as nation against nation. I suppose the way we're headed, State Capitalism will soon be a complete reality and we'll be one corporate nation against other corporate nations, but at the moment America is made up of many private businesses who are competing at home and in a global market with foreign businesses, but the "foreign" doesn't really matter -- it's a global market.
I don't know how contractors can resist the money thrown at them for infrastructure and transportation and green energy, and they won't resist it, but maybe the rest of the companies in America will not fall for the stimulus bait and start expanding based on a temporary influx of money. When the bridge is built, it's over. There's talk about stretching this stimulus over ten years, but how many roads and bridges do we really need built or fixed, and how many people are going to do this type of work?
Our economy is dependent on diversity in the production of goods and services, and much of our economy now relies on hi-tech smart-work, not building bridges. This short term jobs program will help a relatively few people, but it's not enough to sustain real recovery. Our problems run much deeper -- education has to transform to meet 21st century needs, but a large part of our society is not getting the education required for 21st century demands in the global market.
Like I say, another big stimulus will not do much but misdirect more capital. It's a symptomatic solution, and what we need are fundamental solutions which can only be found in a free market, not from central planning.
Ideas are powerful, and decades of denigrating producers and entrepreneurs in this country have had crippling effects. Stalin saw businessmen as glorified accountants with green shades, a dime a dozen to be plugged in here or there and discarded at will. There are many entrepreneurs and business people all across America who know how to produce and create economic growth, but they can't operate under the control of central planners, because that's not how they work. We must release our creativity and productivity by getting government out of the economy and off the backs of the producers. The large corporations who have crony relationships with government should be left unprotected, so that small and medium size businesses can compete and lead the economy to growth and expansion. There's much to do, and a lot of money sitting idly by to do it with -- but producers and movers/shakers have to be released from the control of government -- and government has to let them keep what they make to do with it what they choose without salivating over how to steal it.