The Article Everybody Is Talking About

Terence Corcoran's column from the Financial Post was linked by the almighty Drudge today, which means millions of people will have read it. Is this the end of America?

But America is at risk in other ways, especially in the technical business of setting and executing policy. The presidency of Barack Obama has set out on a course that has no precedent in U.S. history. Franklin D. Roosevelt, whose New Deal transformed the U.S. economy during the Great Depression, pushed America off on a sharply different political and ideological course. The Obama administration is different in many ways, not least in its supreme self-confidence in its methods and objectives.

Reform of health care, environmental policy, education, energy, banking, regulation — every nook and cranny of the U.S. economy has been put on alert for major change. Expansion of government spending, plunging the U.S. into unprecedented deficits, is without parallel. In economic policy, through regulation and control of energy output, financial services and monetary expansion, the U.S. government has embarked on a fundamental reshaping of America. It is designed, in short, to bring on the end of America.

The spillover effect of all this on the rest of the world promises to be dramatically disruptive. The greatest global risk is in monetary and currency policy. Below is a chart that graphically demonstrates the sharp deviation in monetary policy from past norms. Under the chairmanship of Ben Bernanke, the Federal Reserve is in the midst of a giant economic experiment, flooding the world with U.S. dollars, hoping that flood will stimulate economic activity.

Read it all, if you dare. I like to put up lighter things on Friday, so I apologize. Just try to remember the laughs you got last night when President Obama was on The Tonight Show, with Jay Leno.

Backlash to Government Fiscal Stimulus

Terence Corcoran gives a clear eyed look at the Tory's planned fiscal stimulus package in the Financial Post today. (here)

Except for one problem: What if it's not true? What if, as a wide and growing school of economists now suspect, the government spending and stimulus theory is a crock that is shovel-ready to be heaved out into the barnyard of economic waste?

The Prime Minister, in his comments on Friday, seemed to be riding right into the barnyard. He said the government would be simply "borrowing money that is not being used" and "that business is afraid to invest." By borrowing that money, and turning it over to all the groups and interests looking for part of the stimulus spending, he would be jump-starting activity while the private sector got its legs back.

Even disciples of Keynes, such as Harvard's Greg Mankiw, recently highlighted economic studies that show government spending binges -- shocks, they are sometimes called -- don't seem to help the economy grow. They might even make it worse.

We're now seeing the effects of the Coalition's attempt at a coup. The Conservatives are taking advice from likes of the NDP and putting together this ridiculous budget. How Layton railed that the Harper government "wasn't doing anything." Boy, I wish Harper stuck to not doing anything.