Faith at the easiest time of abandon

On Tuesday, Speaker of the House Nancy Pelosi said Democrats are open to another $700 billion stimulus package if necessary, spurring sharp criticism from Republican lawmakers. House Minority whip charged that the statement represents the acknowledgment of the failure of our last $787 billion stimulus package. Democrats have since distanced themselves from PelosiâÄôs call, but if it turns out, a couple months down the road, that the current stimulus indeed failed to jolt the economy back into gear, we will undoubtedly see these Democrats rally behind Pelosi and her Keynesian predilections. Pelosi indicated as much, back-peddling, âÄúI think that it is not a near, near thing.âÄù As the guilty plea of disgraced Ponzi-schemer Bernard Madoff dominates front pages of newspapers across the nation, the narrative of greedy corporate America evokes yet stronger resonance. Indeed, our politicians have primed us lately with an abundance of rhetoric casting Wall Street in direct opposition with Main Street. In this economically polarized atmosphere, it has become far too easy to distance oneself from the clubby, short-sighted avarice of perpetrators such as AIG; it gives those whoâÄôve seen their pensions shrivel to fractions of their former heft an outlet of blame, and rightly so. But we must not lose sight of the intricate ways in which Wall Street and Main Street are one. When President Obama signed the stimulus package into law, Wall Street provided a lukewarm reception. It shed 13 percent of its value over the following three weeks, finally hitting a provisional bottom at 6,547 points. Talk about stimulus. this much is clear: investors, part of the larger culture of fiscal conservatism, are not keen on demand-side economics. Wednesday, South CarolinaâÄôs Gov. Sanford rejected portions of the stimulus awarded to his state, and yesterday, Gov. Rick Perry of Texas turned down $555 million in Federal debt-dollars to expand benefits for the unemployed to cover part-time workers. Actors of this persuasion feel that buying the economy out of recession is akin to giving a half-assed Heimlich to someone choking on a balloon: while the rubber could head closer to departure and the choking victim closer to salvation, tragically, itâÄôs only an illusion: now there is less of the air necessary to fully expunge the balloon from our victim. Rather than passing another stimulus out of fear and desperation, Americans and Democratic legislators should take heart to remember back to their high school economics class: recession is a necessary portion of the overall health of an economy. In principle, the reduction of economic activity disproportionately cleanses the less efficient activities of our economy. The economy does not need another stimulus, but a âÄúconsensus of the bottom.âÄù Once investors feel stock, home and commodity prices have hit a strategic point of undervaluation they will buy, and when they do so, the economic activity that follows will be stronger, more predictable and healthier. It will be based on logic and precedent, not the die-hard belief that reckless spending can keep the economy running at its best. It can not. That more Americans are saving now should not be dismissed as selfish gain-seeking: for those of us who have forgotten, gain-seeking is the bedrock of capitalism. These savings, which some view as dollars that could be spent now to resuscitate a sick economy, will provide that resuscitation when the investor in each of us believes it prudent, whereupon a large base of capital will flow back into business, the Dow will soar and pensions will find relief. Our economy does not need more spending, rather it needs from all of us the patience and faith to see a bottom through. Of course, this very philosophy is being lambasted as the failures of the last eight years. But make no mistake: President Bush was a Keynesian, albeit one who viewed deficit spending as an appropriate avenue for American military build-up, rather than social welfare. The Keynesian impulse represents short-sighted pandering at its worst. For now, investors and those worried about our economy should breathe a sigh of relief that Speaker Pelosi has backed off a second stimulus package, which would in effect only lengthen the floundering of our economy by clouding our search for âÄúthe bottom.âÄù This search will take time, and doubtless the Democrats will return with another stimulus in the coming months. Do not give in to the frightening ultimatum the Keynesians shove down our throats: ‘Spend now or weâÄôll spend for you. If we do that, America will only find itself choking on a larger balloon down the road. Expunge the balloon once and for all, let the markets flounder and cleanse, do not employ the unsustainable sympathy that keeps the workers our recession deems unnecessary in a job. Let the companies our economy has disproportionately punished fail: thatâÄôs capitalism.