In his syndicated column, Walter Williams writes about how economists that are any good are likely going to be perceived as uncompassionate hard-asses. Looking at reality from a practical standpoint, economists don’t have much use for phrases like “affordable housing and health care”, or sentimental musings like “if we can save one life, then (the tremendous expenditure of taxpayer dollars) is worth it.” Also, as a good economist, has some advice for Congress and the president about how to get out of our current economic predicament: do NOTHING.
Speaking of worthlessness, I’d be worthless as an adviser to either the White House or Congress because if they asked me what they should do to get the economy going, I’d answer, “Do nothing!” Let’s look at it. Between 1787 and 1930, our nation suffered both mild and severe economic downturns. There was no intervention to stimulate the economy, but the economy always recovered.
During the 1930s, there were massive interventions, starting with President Herbert Hoover and later with President Franklin D. Roosevelt. Their actions turned what would have been a sharp three- or four-year economic downturn into a 10-year affair. In 1930, when Hoover began to “fix” the economy, unemployment was 6 percent. FDR did even more to “fix” the economy. As a result, unemployment remained in double digits throughout the decade and reached 20 percent in 1939. President Roosevelt blamed the high unemployment on his predecessor. Presidential blaming of predecessors is a practice that continues to this day.
You say, “Williams, the White House and Congress should do something.” The track record of doing nothing is pretty good compared with doing something. None of our economic downturns in the century and a half prior to 1930 lasted as long as the Great Depression.
It would be political suicide for a politician to follow my counsel — and for good reason. Americans have been miseducated into thinking that Roosevelt’s New Deal saved our economy. That miseducation extends to most academics, including economists, at our universities, who are arrogant enough to believe that it’s possible for a few people in Washington to have the information and knowledge necessary to manage the economic lives of 313 million people. Good economists recognize our limitations, making us not nice people to be around.
Of course, the “do nothing” strategy ain’t gonna happen. Like he said, it would be political suicide for an elected representative to suggest we let the markets take care of themselves. His constituents would scream “do something – that’s what we elected you for!”