Forget a New 'New Deal,' Unleash Small Business
Malone: To fix this economy, it won't take a dam, it'll take venture capital.
Jan. 8, 2010 -- Mr. President:
Got $2 billion to spare if it has a chance to turn around the economy?
You probably do, what with all of those hundreds of billions in repaid TARP funds you were talking about using for a "second" Stimulus. Given that the first one didn't do much good, it seems like a dumb idea to try to same old Keynesian trick again. When it comes to recessions, the rule is: If first you don't succeed, try, try a different economist.
The advantage of this new strategy is that it is not only cheap, but it also has the best chance of creating all of those new jobs America needs if we're not going to have a "jobless recovery." And you know how important that is: reportedly, job creation is going to be the theme of your State of the Union address in a few weeks.
But you've got a problem. After a year in office spent trying to restructure the economy instead of actually fixing it first, we now find ourselves sputtering along as other nations in the world begin to recover. We've taken on astronomic, historic debt. Unemployment is not only at Great Depression levels in some regions, but isn't likely to improve anytime soon. And the nation's economic heart, its millions of small businesses, are hunkered down, afraid to invest in themselves or hire new people, because they are rightly fearful of what bomb you are going to drop on them next: higher taxes, carbon offsets, card check, etc.
The FDR/New Deal model isn't going to work this time (actually, it didn't work the first time either: my family lost its Oklahoma farm in 1938, not 1933). Colluding with Big Business and Big Labor (and Big Pharma lately, too) in some kind of progressive fantasy from 1910 won't work either, as you saw last year. GM is still in trouble (with GMAC now added into the mix) and the unions you protected not only aren't any stronger, they are more hated than any time in their history.
There's no Hoover Dam/CCC/WPA solution available either. If you were going to try that, it would have been last year, when Americans were so frightened that they would have accepted some sort of shovel-ready make-work emergency action. But the panic has now passed, and, frankly, you don't have the enough dough left to pull it off. Besides, emergency measures like that require the citizenry to put enormous faith in the competence of the federal government – and right now your approval numbers are tumbling, and Congress's are so low they aren't even in the tank, but in the dirt under it.
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