Before I get to the post of the afternoon, let me just share my daily anecdotal story of economic doom.
My cousin, Eric, is the manager of a widget factory in Chicago. They either make rubber bands or plastic bags. I can't seem to retain that bit of information. Anyway, about five years, the factory and my cousin were transported to China. All the workers in Chicago were fired, and new, cheaper ones were hired in China. Well, that factory closed in China last week, and all those workers were fired. Nobody wants rubber bands or plastic bags anymore.
Since I'm on a roll irritating the libertarians, I think I'm going to keep going.
David Brooks today writes that Obama is about begin in the world's biggest political engineering project with his economic stimulus package and other policy proposals. While liberals think that government can fix things, conservatives think that human society is way too complicated and anytime that government gets involved, it makes a right mess of things. Welfare=welfare queens.
While Brooks hopes that Obama is successful, he's worried that he won't be.
All in all, I can see why the markets are nervous and dropping. And it’s also clear that we’re on the cusp of the biggest political experiment of our lifetimes. If Obama is mostly successful, then the epistemological skepticism natural to conservatives will have been discredited. We will know that highly trained government experts are capable of quickly designing and executing top-down transformational change. If they mostly fail, then liberalism will suffer a grievous blow, and conservatives will be called upon to restore order and sanity.
It’ll be interesting to see who’s right.
The conservative model has already been discredited. The hands-off approach meant that government turned a blind eye as stock brokers sold crap, people bought cathedral ceilinged monstrosities, and greed raced on without some necessary speed bumps. Now, we are looking at nationalized banks. And the banks are begging for it. There are no libertarians on Wall Street.
I don't know if Obama is going to succeed or not. I have no idea how he's going to create the demand for rubber bands or plastic bags. But the death match between political models has already been fought. The decision has been made.
UPDATE: Read Stephen Walt's reaction. And Tim Burke.
Megan McArdle gives a sensible response.
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