Refreshing

It's always refreshing to read some economic sense and truth in one of our national newspapers. Iain Martin nails it in a great article in today's Telegraph:

""This is not a Great Depression," said Obama, and he is right to emphasise that the economic crisis is not preordained to become one, even if global industrial output is collapsing and world trade is atrophying. But it will easily become another Great Depression if the Obama-Brown approach is applied for any sustained period and the printing presses keep rolling
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The PM talked yesterday of "creating jobs". He often claims that "we" – meaning the Government – have "created three million jobs". It has done no such thing. His Government is responsible for employing a lot of extra public servants, but governments do not "create jobs" in the private sector. Companies, and free individuals do. When politicians try, they fail and leave taxpayers with the bill.

Unlike governments, markets – which the demonstrators seek to demonise – allocate resources efficiently. They locate value, reward innovation and efficiency, but can get out of control when politicians create too much cheap money and promise that the good times will never end.

A further truth is that government could not prevent the horrors of the potential next stage of the crisis, even if it tried. That calamity would come in the shape of the collapse of pension funds and insurance firms. These rely on equities: buying, holding and trading them to turn them into a profit for you and themselves. But the plummeting stock market left these institutions in terrible positions. Quietly, the question forms of how they are to meet their liabilities when their equities are worth so much less than they expected. If you want to see real fear, mention this to a member of the Government. Is there anything left in the kitty for bail-outs of institutions that are not banks? There is not.
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Recovery will of course take much more than an upturn in share prices. There are years of terrible hardship ahead. But one can glimpse how the capitalist instinct for profit will work its magic again, and sooner than we think."

What will certainly disrupt this process is big, slow-moving government trying to dictate the pace and direction of recovery: owning car companies, running banks, trying to "create jobs" and clocking up debt which turns into enterprise-inhibiting taxes.

Obama, Brown and the rest at the G20 can encourage recovery with their words today; they cannot create prosperity. Individuals and companies, operating in free markets, will do that. But only if we let them."

Thank you, Iain, for saying what needs to be said, eloquently and concisely. We are coming to a critical ideological juncture: do we place our faith in big government, and an even more centrally-managed economic system, or do we use our reason and identify the real problem: big government and the centrally-managed economic system? The mission for those of us who understand that addressing the latter is the only viable, sustainable, and ultimately, moral option, is to do all we can to educate and persuade others, using whatever platform we can.

This is the critical question of our times. Iain Martin, by saying what he has, in the way he has, using the platform he has, has done freedom a service. Let's all try to emulate that.

Amusingly, I discovered this in the comments section:

"You know, I thought I was a Capitalist? So, who do you think is captalist, the ones on dole,or the Teegaph/Writers may be?"

This inane, barely legible comment comes from: guess who? A local councillor!

"Cllr Ken Tiwari (Independent)
on April 02, 2009
at 08:38 AM"

Whether that's actually true is not verified, but if it is, God, how unsurprised I am.