Markets Figure Things Out

In his weekly podcast Econtalk, Russ Roberts talks with fellow George Mason professor Garrett Jones about the people who were hired with money from the 2009 stimulus package... Jones, when discussing Keynesian policy, explains how government, during recessions, will put some unemployed folks back to work paving roads, building bridges, etc... Essentially making good use of available labor, while markets figure things out (or words to that effect)... Suggesting that the creation of infrastructure jobs is simply something that happens in the meantime, neither helping nor hurting measurably, while market forces (not, as Keynesian's would suggest, government spending) bring the economy back to life...

I can (in theory) live with that... I.e., rather than just throwing unemployment benefits at all these folks, finding something useful for them to do until the economy cycles back around...

So what's the problem this time around? Why is the economy, when there's sooooo much liquidity in the system, when interest rates are sooooo low, not budging? It's disgustingly, outrageously, and stupefyingly simple... This time around, rather than staying out of the way and allowing the recession's aftershocks to settle, rather than allowing consumers to regain their emotional footing, government has heaped upon their employers (present and would-be) countless pages of new regulations and the threat of higher taxes...

Stay tuned.......