Obama to use Shock Therapy for Bush’s Depression

“By acting without rhyme or reason, politicians have destroyed the rules of the game. There is no reason to invest, no reason to take risk, no reason to be prudent, no reason to look for buyers if your firm is failing. Everything is up in the air and as a result, the only prudent policy is to wait and see what the government will do next. The frenetic efforts of FDR had the same impact: Net investment was negative through much of the 1930s.”–Russell Roberts, George Mason UniversityReal Clear

Barack Obama says the next stimulus should deliver a “jolt.” His adviser Austan Goolsbee says it must be big enough to “startle the thing into submission.” Their theory is that the crisis is largely psychological, requiring shock treatment. But shocks from government have been plentiful. —Real Clear Politics

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