Wednesday, July 8, 2009

Wrong Way

While Lord Obama has addressed the economic downturn with enormous spending programs and demands for dramatically higher taxes, in Germany Angela Merkel took another path. Merkel eschewed massive spending of money that had to be borrowed or printed. She has proposed the course of action that Ronald Reagan used to launch America out of our post-Carter tougher times: lower marginal tax rates.

So what? Well, while we're seeing that the fabled "green shoots" have been hit by a dose of Round-Up, Germany is seeing something different:

German factory orders jump
May orders rose 4.4% from April,
the 3rd straight gain and the biggest
since June ’07, the gov’t said. Domestic
orders rose 3.9%, while orders
from abroad rose by 5.2%. The
data raised hopes that Europe’s No.
1 economy could soon emerge from
its deepest recession sinceWWII.

Many people pretend that Obama is in waters where no ship-of-state has ever ventured. They applaud his efforts at navigating without a map. Hogwash. (Or, as Governor Palin said yesterday, "Bull crap!")

The stock market correction of 1929 was turned into a world wide depression that lasted a decade by FDR's government programs. Confronting a mess created by Nixon/Ford/Carter President Reagan slowed spending and cut tax rates leading to a 25 year boom. If he had employed the FDR model we would have had a depression. The boom years that GWB ushered in in October 2003 didn't stop until the markets saw the inevitability of an Obama presidency about a year ago.

It isn't that Lord O is in uncharted waters. The problem is that he's Capt. Wrongway Peachfuzz.