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    Wednesday
    Jan092013

    Progressive Conundrum

    The head of the Chamber of Commerce was on Bret Baiers' special today, and he reiterated what many of us have said for a long time regarding this down economy. He said that the fiscal cliff deal didn't help, but we also have a regulation cliff. Obamacare, Dodd-Frank, which is only 25% completed, and all the EPA regulations add to the market uncertainty. He said if government can get its act together and provide some sense of stability regarding regulations, taxes and costs of doing business associated with all government interventions, we'd see economic growth like the world hasn't seen in a long, long time. We would attract foreign investment, and the economy would boom. The Progressive conundrum is that they can't provide the welfare state they want to provide without healthy economic growth, but in order to allow economic growth they have to stop intervening in the economy, and they haven't been able to do this.

    I don't know if Progressives/Statists really believe that government interventions are necessary to spur economic growth, or whether they're afraid of losing control if they allow more economic freedom. I believe economic freedom is the only path to real, sustainable economic growth which creates new wealth. The problem for Progressives is that even if they relax on regulations and stop interventions for awhile, they don't have the patience to wait for economic adjustment from non-productive activities to productive economic activity, plus, they wouldn't likely appreciate the direction growth takes, such as booming energy production.

    Another problem is that public education isn't preparing enough young people for the difficult brain work today that pays the highest wages, so the recovery will be uneven as educated workers make a lot of money and the poorly educated make next to nothing. Progressives will not allow this inequality -- they will have to intervene by raising taxes and redistributing the wealth, thus creating the problems of uncertainty again. If Progressives don't allow economic freedom sufficient for economic growth and wealth creation, they can't fund the government they desire, and, if they allow economic freedom, they lose power and control and are forced to accept inequality, or allow education reforms that are comprehensive enough to meet the demands of the 21st century labor force. Progressives will not even much think in terms of education preparing young people for work, much less will they allow the types of fundamental solutions, including private solutions, that are necessary for lower class advancement.

    Progressives can tax present wealth only so much, and then they run into a wall. Sustainable economic growth and new wealth creation are vital to the Progressive agenda, but their "investments" won't do the trick, and they can't allow a free market, so they're stuck in stagnation until they can think of more interventions that will work -- good luck with that. Progressives would no doubt accept stagnation, if we could fund welfare solutions to give each person a decent living, but this is not possible -- it takes new wealth creation to keep a large welfare state functioning, and stagnation in a global market will not create new wealth. In the meantime, the unemployed and underemployed will have to wait until enough people, often including themselves, realize the Progressive agenda is a systemic failure.

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