Monday, 19 January 2009

Mexico Brings Lesson to Obama, Says Bloomberg. Tom Black Hit the Nail on the Head

This is one excellent story as a curtain raiser for the Obama inauguration tomorrow, courtesy of Bloomberg Mexico reporter Thomas Black. Click on the link here, sit and enjoy your reading. My only comment to this is that, recently, I had a chat with several economists and many of them said that the typical Keynesian approach of boosting public expenses in large infrastructure works may not work this time. Some of them recalled an interview with Nobel Prize winner Paul Krugman, who said in the occasion that it would be quite hard to find enough viable projects for the economic rescue package. And we have to agree with them all -- and with Tom: the bigger the size of the stimulus, the harder to find where to spend the money on.

Nevertheless, we hope Obama and his team make it. Infrastructure spending should kick start some activity and prevent a more significant loss of jobs, but it was not, is not and will not be a panacea. And, more importantly, it will not be enough to fix the global economy, nor pave the way for a global recovery. We in this blog wished that voters were more skeptical over the government's capacity to fix things and instead urged for less state intervention. But asking for that at this moment could be nothing but ... absurd.

1 comment:

  1. Did you know Obama is lowering insurance rates? Check out his new qoutes. Please participate in "Blogger Earth"
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