In the Long Run We'll All Be... Fine

When recessions hit, the worst thing the government can do is something.

We have a Federal Reserve trying to prop up a sagging economy by cutting interest rates — at a time when inflation is already a problem. There’s a name for that, and anyone around during the ’70s should shudder at the mere mention of “stagflation.” Better to do nothing, and sinking demand will eventually sort out the oversupply of goods and dampen inflationary pressures.

We have two Democratic contenders desperate to shore up American jobs by cutting off trade. A Republican Congress tried that during one nasty downturn, and anyone around during the ’30s should shudder at the mere mention of “Great Depression.” Better to do nothing, because trade creates more jobs than it destroys.

This is simple stuff, really. But we have a Fed chairman and a couple of would-be presidents who Just Don’t Get It. We’re in trouble, and for no good reason.