Indiana

ECON 101 (Redux)

By Abdul Hakim-Shabazz

I wrote this post back in January.  In the wake of today?s financial meltdown and subsequent baliout/rescue, I thought it was worth re-posting.

ECONOMICS 101

With a recession breathing down America?s economic neck, the politicians and bureaucrats in Washington are scrambling to do something.

They?re seriously considering giving tax rebates to people who don?t pay income taxes.

And they?re also lowering interest rates so people who make bad business decisions on the stock market can borrow more money and make even more bad business decisions on the stock market. This comes from a need to do something to save the economy.

Well here?s a thought, how about we do nothing? That?s right, nothing. Recessions and economic slowdowns are normal parts of the business cycle. You need them to help eliminate inefficiencies and waste in the economy.

Remember the dot-com bust of the late 1990s? Stupid internet companies went away and the strong ones survived.

That?s what we need to fix our American economy. We need to let the system crash and the financial bodies hit the floor. Bad companies need to go away so good companies can rise to the top. This is the only way for the market to truly correct itself after 20 years of unprecedented growth. This is Econ 101 folks.

We can?t keep artificially messing with the economy because the longer we try to hold back the bad times, the harder they?ll hit when it all comes crashing down. Just think October 1929, if you still don?t get what I?m saying.

 Days like this I feel like Nostradamus.

Full post as published by Indiana Barrister on October 02, 2008 (boomark / email).