Tuesday, June 8, 2010

Why The Economy Still Stalls

We have been in recession for well over 2 years, with no relief in site. Most recessions only last about 18 months. So, why is this one being so tenacious?

There are a number of aspects to this, but the biggest one is the mixed message being sent by the White House. On the one hand, they order the Fed to provide huge sums to the banks, to ease the credit crunch. But on the other hand, the administration takes the banks to task with their "financial reforms" bill, effectively preventing financial institutions from loaning that money out. So the credit crunch is not eased, businesses cannot grow, and the economy continues to suck.

And then there is the administrations' stated intent to hamstring businesses with higher taxes, increased capital gains taxes and more regulation and stronger unions. What business will hire or expand under those conditions? Not mine, that's for certain.

All in all, it appears the administration is purposely trying to derail the free market and capitalism (in order to introduce socialist policies), but in the process they put on the APPEARANCE of trying to "fix" the economy.

This is just like a coach who gives his football players a great pep talk and provides the best padded equipment, then orders them to not come in physical contact with the opponents because someone might get hurt. It is a certain recipe for losing.


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