RAHN: Shape of things to come?

When you build a house on a foundation of sh*t it doesn't crumble the next day. Less regulation, lower taxes to the rich, true Democrat values....to all of those who believe this bs I've got a lot of land just east of Hatteras you can get for dirt cheap.

This sounds too fantastic to happen, but take a look at Zimbabwe and Venezuela. They had growing economies until their government massively disrupted the economy with their interventions, creating higher unemployment and inflation. The same can happen here in America! We're in a global economy with business and manufacturing that are global. If America makes itself a place too costly or complicated in which to do business and turn a profit, businesses and investors can and will go elsewhere. And they'll take their money and wealth with them to other nations that do value their business. The pols had better think very carefully about that before they enact any laws that make it harder or more costly to hire workers, or that raise businesses' operating costs.

According to his bio, Rahn is the former executive director of the American Council for Capital Formation (ACCP), a DC-based freemarket think tank that has received over $1.6 million from oil-giant ExxnMobil. Rahn is listed as an "Adjunct Scholar" at the Cato Institute, a DC-based freemarket think tank that has received funding in the past from ExxonMobil, as well well-known energy industry-money backed charitable foundations like the Charles G Koch Foundation. Enough said. Sounds like the rantings of another washed up Neocon who still can't beleive they lost the election.

Mr. Rahm has pretty much nailed it. The Jimmy Carter-like proposals of the Obama administration and the Pelosi/Reid congress have all the makings of a disaster. The democrat congress and their supporters like kevinl will place their heads in the sand or just leave them up their butts and do nothing until it’s too late. They will also continue to pursue name calling as a key element of their agenda. Socialism is a bad idea that has been tried and has failed…everywhere.

Finally, someone put onto the paper the distortions that happen when the federal government interferes in the market. Barack Osama (not a typo) and Pelosi/Reid Congress are simply trying to destroy our way of life with their Marxist philosophies. Unfortunately American's are too unwilling to think and look around the world to see the results of these types of policies (due to failed publicly funded education system run by those that couldn't otherwise find work). Disaster is coming. Better start hoarding food folks . . .

kevinl: Enough not said. The only thing missing from the article is the transition to global socialism. Why else would Hillary step down to SoC and then state that global warming was national security issue. Global carbon tax will provide the funding, the IMF will provide the finance, the ICC will provide the judiciary, the U.N. will provide the framework and the SoC's will have global proxy power greater than the heads of state. The only thing missing is the compliance branch of consensus only U.N. That agenda item will be completed when Obama internationalizes our military. Economically, a combined Europe and U.S. socialism can temporarily expand their socialist business markets internally to buffer the effects of globalized economics. The missing foundation piece will be energy and the U.S. will have to change its carbon restrictions and green plan just like the energy czar's position on clean coal instead of green, but it will all wash in the political propaganda created by the internet extension of the Fairness Doctrine.

4freedom is on target! I would only add that while you stock up on food people should also stock up on ammo.

This is an interesting work of science fiction. The future depicted here, however, can be avoided with good public policy. Most economists disagree with Rahn’s views concerning the causes of the financial crisis/housing bubble. Here is a good summary of causes (and non causes) by Menzie Chinn: http://www.straightstocks.com/global-economics/stuff-happens-the-bush-administrations-economic-stewardship/ In short, he, as most economists, believes that Fannie, Freddie and the CRA are red herrings. And he also believes monetary policy was only slightly lax and played a very minor role. The real causes were poor regulatory and tax policy. The housing bubble was caused by speculative buying in part fueled by an excessively lenient capital gains rate policy. It was given further fuel by a mortgage deduction for second homes started in 1997, the very year that the housing bubble started to inflate. Secondly, what Christina Romer truly believes about fiscal policy has been greatly mischaracterized by unrepentant supply-siders such as Greg Mankiw. Here is a good summary by Brad Delong of David and Christina Romer’s position regarding tax and spending multipliers: http://delong.typepad.com/sdj/2009/01/the-romer-view-of-tax-and-spending-multipliers-revisited.html In short, because of omitted variable bias, both kinds of fiscal stimulus are likely to be more effective than previously estimated, and that there is no reason, based on her research, to believe that tax cuts are more effective than spending increases. There is other evidence that suggests that, in stimulating aggregate demand during a recession, spending increases and refundable lump sum tax credits are in fact much more effective than across the board tax cuts. Here are Mark Zandi’s estimated fiscal multipliers during a recession: http://www.econbrowser.com/archives/2008/10/pocketfull_of_m.html These estimates are, of course, consistent with the multipliers used in Romer’s recently released estimates of the effects of the proposed stimulus (see page 13): http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf

Implicit in this article is the conservative revisionist opinion that the New Deal prolonged the Great Depression. This is an idea that is being promulgated by non-economists such as Amity Shlaes (BA in English). Here is what a real economist (Christina Romer) thinks about the New Deal: “Any smart historian of the 1930s is a New Deal critic. The Obama administration unquestionably needs to respond more effectively to the current crisis than the Roosevelt administration did to the Great Depression. But not because the "New Deal didn't work," as conservative pundits are now frequently saying -- it did. It didn't go far enough fast enough, and it included some other mistakes from which we can usefully learn, but ignoring its successes will only make things worse. The most important thing to know about Roosevelt's economics is that, despite claims to the contrary, the economy recovered during the New Deal. During Roosevelt's first two terms, the U.S. economy grew at average annual growth rates of 9 percent to 10 percent, with the exception of the recession year of 1937-1938. As economist Christina Romer (now director-designate of the Council of Economic Advisers) writes, these rates were "spectacular, even for an economy pulling out of a severe recession." “ Source: http://www.prospect.org/cs/articles?article=learning_from_the_new_deals_mistakes Thankfully, Obama has many good economists advising him, who know that the New Deal was effective, and that understand the true causes of the current crisis, as well as what it will take to get out of it. Thanks to them your story will remain what it is: science fiction. And because of them we will be able to avoid a replay of the Bush administrations pathetic economic record, the worst since Herbert Hoover: http://www.washingtonpost.com/wp-dyn/content/graphic/2009/01/12/GR2009011200354.html

Just exactly how is an exact 20th Century New Deal solution going to solve a 21st Century problem? Obama isn't even looking at a 21st century infrastructure model. At least Reagan had his own ideas on how a Keynsian economics model, not a 1930's duplicate, should work. Where is the behavior modification, where are the MagLev's, where are the all electric energy cities (including mass transportation)? Where is the vision? The Obama plan is simply the old Democrat paradigm of throwing money at the problem in order to control it for their sources and tax indenture the citizens to the single party government.

MarkASadowski great work, you actually have sources that is not what you usually see around here. What you see around here is regurgitated right wing talk show swill. Once again great posts. Keep them coming.

Thanks truthwilltell, No matter what others may think I'm not a bot. I do this out of true love for my country and adherance to good public policy. I truly appreciate the occasional attaboy.

This is the worst of many bad articles this paper publishes. Of course, what would you expect coming from the Cato Institute. The facts disprove this article -- the largest growth in the Government, annual deficit, and national debt occurred under 8 years of Reagan and 8 years of Bush II -- not under 8 years of Clinton. You whacked-out right-wingers continue to point the finger at Democrats when the real culprits are Republicans.

"inflation is close to 40 percent" The latest producer price index (PPI)results were just released today. They revealed that the PPI fell at 27.6% annual rate in the last three months. Where is the hyperinflation that the Washington Times keeps forecasting?

MarkASadowski: The Washington Times in not predicting hyperinflation, this is a commentary page with one authors opinion and a bunch of bloggers. Obama hasn't taken office yet, so the PPI is not really a measure of effectiveness for his actions. Inflation is created when there is a continual increase in the money supply chasing too few goods. We have had two stimulus packages, so that probably won't be considered continuous, however, any more deficit spending will be considered continuous and to what end, i.e. what goods is the money supply chasing. Road and bridges aren't exactly negotiable goods since we can't sell them and we will be using the same money to maintain them. Therefore, what is to stop inflation? If there are no negotiable goods produced, then what is to stop hyperinflation, i.e. the impact is compounded like the derivatives in high risk loans of the Fannie Mae subprime debacle (thank you Bill Clinton, Barney Frank and Chris Dodd). When Obama takes office, we will see.