the Historical and Economic Illiteracy of the Political Class

Thomas Sowell Exposes the Historical and Economic Illiteracy of the Political Class:

In Part I, he decimates President Obama’s new stimulus scheme.

President Obama repeats the same kinds of things that have marked his past policies — more government spending for the benefit of his political allies, the construction unions and the teachers’ unions, and “thousands of transportation projects.” The fundamental fallacy in all of this is the notion that politicians can “grow the economy” by taking money out of the private sector and spending it wherever it is politically expedient to spend it — so long as they call spending “investment.”

In Part II, he exposes the historical illiteracy of folks who think government intervention ended the Great Depression.

The grand myth that has been taught to whole generations is that the government is “forced” to intervene in the economy when there is a downturn that leaves millions of people suffering. The classic example is the Great Depression of the 1930s. What most people are unaware of is that there was no Great Depression until AFTER politicians started intervening in the economy .. politicians decided that they had to “do something.” Within 6 months, unemployment hit double digits ..

And in Part III, he explains how tax changes in the 1920s provide great evidence for the Laffer Curve.

.. Mellon eventually got his way, getting Congress to bring the top tax rate down from 73 percent to 24 percent. Vast sums of money that had seemingly vanished into thin air suddenly reappeared in the economy, creating far more jobs and far more tax revenue for the government.