Tuesday, July 22, 2008

Government Action on the Economy

There's a lot of hand wringing and finger pointing going on over the state of the economy. Housing is still in trouble as is the banking sector, and business is generally slow across the board.

While it is time for the powers that be to take a good look at what they do and how it effects the markets, they should take some cues from history.

It will be a while before the events of the last few years and the coming couple of years will be carefully and more objectively analyzed. There are still aspects of the 1929 crash and the Great Depression that are vigorously debated today. Still there are a few things to remember.

You seldom see an analysis that says, the thing that pulled us out of the downturn was increased government regulation, or higher taxation, or restricting trade. There's a problem, maybe several, but I'll bet a dollar it has to do with the government trying to control too much, not too little.

I hope government officials can resist the temptation to grab headlines by offering more controls. Freedom is what fuels this train. What we need now is more fuel.

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