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Subject:  Doing nothing Date:  3/14/2008  2:27 PM
Author:  FleaBagger Number:  35383 of 549

The Fool is wise to advise its readers that doing nothing is often the best course of action in a market panic. In many cases, fear impels us to do things for which hindsight will rebuke us.

A parallel can be drawn to the government and politics. When an economy goes into a recession or a sector is savaged during the deflating of a bubble, politicians feel the need to do something to stop it or mitigate it. The problem is that most things that government can do to visibly (and therefore politically popularly) help the stock market or a sector of the economy, will actually do far more long-term harm than short-term good, and will be very difficult to reverse. We are still subsidizing the growing of crops which have skyrocketed in price due to demand for a fuel we are subsidizing to create more energy, though that fuel takes as much energy to produce as it yields when used, and we are also subsidizing the companies whose product we supposedly don't want to use anymore and we are subsidizing ballparks for billionaires and not requiring them to pay taxes while we tax poor, working young people to pay rich, retired elderly people's social security, et cetera....

(I am one of those mean-spirited people who oppose taxing the rich to give to the poor, but can't we all agree on not taxing the poor to give to the rich? Let's start with that.) Anyway, all these things, with the exception of the sports team owners thing, were government solutions to problems from which voters cried out for help. Our recessions have been brought on by the political solutions to our parents' problems and exacerbated by the political solutions to last year's problems, and our solutions to these recessions will be the burden our children (and we young people) will have to bear, next year, 2010, and for generations to come.

Don't get me started on the Bear Sterns bailout, mortgage bailouts, sugar tariffs, or the welfare state's effect on the ramifications of immigration (legal and illegal) and policy relating thereto.


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