Mr. Obama - Government Had a Hand in This Mess. Why Believe It Will Get Us Out?

From Yahoo! news:

Making his case in the most dire terms, President Barack Obama said that if Congress does not quickly pass an economic stimulus package, the nation will slip into a crisis so deep that "we may be unable to reverse" it.

"We can't afford to wait. We can't wait to see and hope for the best," Obama said in Elkhart, Ind., a community reeling in job losses during the recession that has defined his young presidency. "We can't posture and bicker and resort to the same failed ideas that got us in into this mess in the first place."

The emphasis is mine.  President Obama, many very bright people have noted that government is one of the root causes of the current recession.  Craig Newmark at Newmark's Door has posted his readings list for an MBA course at North Carolina State University.  Many of those readings show how government got us into this mess in the first place.

Surely you know that the economy is a very complicated place.  An economy is an aggregate of markets, each of which is a very complex in its own right.  Why should we believe that politicians in Washington have more knowledge about how markets operate compared to the buyers and sellers who interact in markets every day?

Moreover, why should we believe that politicians won't act in their own interests, even when those interests conflict with the interests of the citizenry as a whole?  You yourself have just gone through a rocky first few weeks of office where embarrassing revelations came out about several of your political appointees.  Another member of your party, Chris Dodd, still hasn't come clean about the Countrywide mortgage deals he got back in 2003, even though he said he would last summer.

The incentive and knowledge problems aside, why are you so sure that an expanding government is the cure for what ails us.  Not even the mature Professor Keynes believed that the so-called Keynesian spending stimuli would do much to actually stimulate the economy (see here and here).  If it goes forward as we expect (implemented with a lag), this mess that government helped create may get even worse as inflation rears its ugly head.

This is not to say, Mr. Obama, that government can do no good.  It can.  But count me among the skeptics that the government spending stimulus that you are seeking is the right thing to do.