The economy continues to slow even as the Fed cuts interest rates and injects capital into the banking system. Other industries are likely to get low interest loans and other forms of capital infusion as well. Why isn't all this "economic stimulus" causing optimism and rising prices on the stock exchanges? Because none of it addresses the real problems, which are only getting worse.
You stimulate economic activity not by manipulating data and artificially inflating the numbers, but by making it easier and more rewarding to take risks in the market place. That is not happening. Business is continually being curtailed by more and more regulation and mandates. Next on the agenda is some kind of universal health care, which will be the responsibility of employers. Man made global warming is no longer permitted to be questioned and more regulation, mandates and subsidies will be coming our way from the priests and priestesses of that cult. Minimum wage will be increased, this time probably with some kind of automated increase for inflation. The new administration has said that more funding for education "can't wait", although they've yet to connect throwing piles of money into the system with smarter students. There will be infrastructure spending as well as more subsidies for alternative energy. The federal deficit is completely out of control, so anyone who does manage to achieve some measure of success will be immediately targeted as a revenue source for the government. Those who keep their income low enough, will get a check.
As government doles out cash to struggling industries, it also gains more control. The cash comes with strings. Professional campaigners and attorneys will be making human resource and production decisions on behalf of some of the largest corporations in the country. The people who brought you Amtrak, the DMV and the Postal Service will soon be calling the shots for the major banks, insurance companies and auto makers. The Postal Service, has a federally protected monopoly on first class mail delivery, yet consistently cites cash flow shortages as an excuse for every rising prices, and now will be conducting the first layoffs in its history. That's the level of competence we're empowering.
The small business community is being zoned, taxed and regulated out of existence while large box stores gain multi-year exemptions from the taxes everyone else must make up. This, in spite of the fact that small business accounts for the vast majority of new job creation. Politicians pay lip service to small business, even as they are strangling it.
If you wonder how this mingling of government and big business, along with near zero interest rates and frequent cash infusions might play out, look at Japan. They've been following the same program for over a decade, with no success. Entrepreneurship is out. Bureaucracy is in. We're well on our way to becoming a fascist nation, but nobody's calling it that, probably because most don't really know what it means. Fascism is when producers still get to own their businesses, on paper, but the government dictates what will be produced, how it will be produced, where and when it will be distributed and at what cost. This is being done through subsidy, regulation and the tax code, rather than outright proclamation, but the nature is the same.