Obama on his Hubris, June 8 2011

Tim ShoemakerCampaign For Liberty

Merriam-Webster Definition of HUBRIS
: exaggerated pride or self-confidence

During a press conference with German Chancellor Angela Merkel, President Obama stated, “I’m not concerned about a double-dip recession. I am concerned about the fact that the recovery that we’re on is not producing jobs as quickly as I want it to happen.”

With the dismal job report released Friday, many Americans are understandably concerned about the economy – particularly the long-term unemployed (6.2 million Americans have been out of work 6-months or longer according to the new numbers).

However, policy makers in Washington appear to believe these problems are “transitory” — just temporary setbacks in the “economic recovery.”

Unfortunately for Main Street, these policy makers are suffering from hubris – they are so convinced all their bailouts and stimuli have “cushioned the fall” they refuse to see the world but through their rose colored glasses.

After all, they have the National Bureau of Economic Research on their side — in case you didn’t know, the “Great Recession” ended in June 2009.

Reality paints a different picture.

As Robert Murphy pointed out in an article at Mises.org yesterday, this “prolonged slump” should come as no surprise.

Given the Austrian views of history and the proper things policymakers should be doing during a recession, it’s no surprise that our economy continues to sputter along. Again, this is not something Austrians have been saying after the fact: we’ve been predicting all along that the Bush and Obama “solutions” were only going to make things worse.

The depression of 1920-21 gives a great case study [see Tom Woods discuss it in detail] in how government should react during a fiscal crisis – the Fed raised interest rates and the federal government slashed spending (in what would surely be called a “draconian measure” today).

If you’re not yet familiar with the Austrian view of the Great Depression, you owe it to yourself to pick up a copy of Murray Rothbard’s “America’s Great Depression.”