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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review August 12, 2010 / 2 Elul, 5770

Obama's State Capitalism: A Failure of Modesty

By Michael Barone




http://www.JewishWorldReview.com | "The pace of economic recovery is likely to be more modest in the near term than had been anticipated." Those were the carefully chosen words of the Federal Reserve Board after its meeting Tuesday. Translation into English: We wuz wrong.

So were a lot of people, including departing White House economics adviser Christina Romer, who wrote that the Obama Democrats' February 2009 stimulus package would hold unemployment below 8 percent.

It wasn't just administration spokesmen who expected a solid recovery. California economist Bill Watkins in newgeography.com recalls a conference last fall in which all the other economists presented rosy scenarios and only he forecast extended malaise. He was relieved that his colleagues didn't pelt him with tomatoes.

It's easy for Republicans to make partisan hay of all this. They can point out, as Bush administration economist Larry Lindsey does in the Weekly Standard, that the congressional Democrats' stimulus package was not the timely, targeted and temporary measure recommended by national economic director Larry Summers.

They can add that the threat of pending regulations interpreting the health care and financial regulation bills and of pending tax increases as the Bush cuts expire have created a climate of uncertainty in which consumers don't consume, banks don't lend and businesses don't create jobs.

All true. But in this summer of unrecovery, it's still important to understand how so many smart people got so much so wrong.

One answer comes from economist Arnold Kling writing for american.com. Kling argues that the collapse of the housing market and the financial crisis disrupted what had been "a sustainable pattern of specialization and trade" and that we need to let the market economy develop a new one.

Instead, the policies of the Obama Democrats have been aimed at propping up the old order — holding up housing prices and the mortgage market, keeping the Detroit auto companies in place, maintaining the lush standard of living of public employee union members (the purpose of the $26 billion the House was summoned back to Washington to approve Tuesday).

Maintaining unsustainable patterns of production, Kling writes, prevents the trial-and-error process of private investment that creates new jobs and patterns of production that will be sustainable.

Across the Atlantic, Marc De Vos, director of the Itinera Institute, a Brussels think tank, advances similar arguments in his book "After the Meltdown." The financial crisis, he argues, has brought a revival of "state capitalism," in which governments "have an increased and distorting role in economics."

"The state should be the partner of the market, not the owner or manipulator of the market," he writes. "Governments should not pick economic winners and losers. The state may be back, but the politicians should be modest."

Modesty, unfortunately, is not the dominant character trait of a president who predicted that his election would be seen as "the moment when the rise of the oceans began to slow and our planet began to heal."

But facts are stubborn things. The fact that the private sector economy has not responded as administration economists expected and confidently predicted should be a wake-up call.

It shows the limits of expert knowledge and the ability of political actors to make optimal economic choices.

The intellectual firepower of this administration may be high. But so was the intellectual firepower of the postwar British Labour governments that nationalized steel, auto companies and the railroads.

That didn't turn out so well, and for decades, the British economy lagged behind those of America and its European neighbors. State capitalism has been tried before. It didn't work.

Market capitalism works better because it doesn't depend on one set of actors to make all the choices. Entrepreneurs with a vision for the future can take their chances, and most may fail. But some will turn out to be Bill Gates or Steve Jobs, who change our world in ways that 99 percent of economic experts were unable to predict.

In the meantime, American voters seem prepared to return a negative verdict on the Obama Democrats' version of state capitalism. Bailout favoritism and crony capitalism, it turns out, are not vote-winners.

The open question is whether Republicans will present and advance public policies that leave the way open for market capitalism to find its way to a new sustainable pattern of production, as it has done before. Let's hope for that kind of change.

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

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JWR contributor Michael Barone is senior political analyst for The Washington Examiner.




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