More Stimulus Won't Work

Here is a frightening article on the front page of the WSJ today. The stimulus spoken of here, the $800 billion fiscal Frankenstein that Obama outsourced to Nancy Pelosi within days of taking office, was never going to work and, alas, is not working. And yet it still posssible - because the WSJ did it to write this article - to find economists clueless enough to scratch their heads and wonder if maybe just more and more of the same is what is needed. Our situation is quite simple: the recovery is faltering because of a tidal wave of 1) increasing regulation, 2) energy inflation due to climate change legislation, 3) the prospect of higher taxes to fund a plethora of "progressive" (socialist) public policy, 4) heavy-handed and unpredictable government intervention in the private sector, 5) changing corporate tax policies on overseas earnings, that is bearing down on businesspeople large and small, causing them to hide under their desks. American business is scared, mad, and stunned into inaction. There is no appetite to invest and hire. That is why the recovery isn't there and we stay missing in action. You can throw another $1 billion, hell another $3 billion, of the same type stimulus at us again and it still won't work. The policy and regulatory landscape is looking so awful for American business, people are hiding under their desks, waiting things out.

Read this too.

UPDATE: The Obama administration is today (7/7) floating a trial balloon on the idea of a second stimulus using the Obama economic team member with the least gravitas and reputational risk - Laura D'Andrea Tyson. Larry Summers wouldn't put his name on this terrible idea unless it was a political hit and I imagine nobody else wants to have to flog the idea, so it is up to Tyson to test it out. I can't see it taking hold, it would just get in the way of the spending that the Dems really want to do (healthcare and green stuff) and it would just highlight the embarrassing fact that the last stimulus sucked. I think Congress will run from the idea.