Thursday, June 19, 2008

Damage Limitation for an Obama White House

Two items of interest. One anticipates a natural limit on the damage a President Obama could do economically, and the other sees a possibility of light in a President Obama tunnel.

Brian Wesbury in "Change We Can Believe in is All Around Us" (Wall Street Journal, June 11, 2008), argues that on account of the lightening fast speed with which economic data is available today, the unintended consequences of a foolish economic policy become painfully but quickly apparent to the American electorate who in turn make their displeasure painfully known to elected officials.

Decades ago the feedback mechanism was slow. The unintended consequences of the New Deal took too long to show up in the economy. As a result, by the time the pain was publicized, the connection to misguided government policy could not be made. Today, in the midst of Internet Time, this is no longer a problem. So, despite protestations from staff at the White House, most people understand that food riots in foreign lands and higher prices at U.S. grocery stores are linked to ethanol subsidies in the U.S., which have sent shock waves through the global system. This is the good news. Policy mistakes will be ferreted out very quickly. As a result, any politician who attempts to change things will be blamed for the unintended consequences right away.

Bruce Bartlett explains how various neocons and libertarians are viewing Obama with hope in "Mr. Right? The Rise of the Obamacons" (The New Republic, June 25, 2008).

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