The Rube Goldberg Economy

Holman Jenkins had another characteristically excellent column in the WSJ this week. Writing on the auto industry, as he has frequently done over the past few weeks, he pointed out that the Detroit crisis is truly a crisis that was hatched and nurtured in Washington. I recommend it to you, but there was another part of the article that caught my eye.

Jenkins had this to say:

There’s a larger lesson here for the Obama administration. A whole lot of Rube Goldbergism is coming home to roost, in the auto business, in the mortgage market, in the health-care market, in farm policy. We need to simple-down. The economy has a giant adjustment ahead, paying off debts, going from a heavy absorber of foreign capital and goods to a rebalanced relationship with the world.

Rube Golbergism indeed! In fact, if you close your eyes you can easily imagine the gigantically monstrous, creaking, clacking, lurching machine that our economy has become. At its heart is an engine so strong, sleek and pure that it somehow manages to cart around all of the junk that has been bolted onto it over the years, yet as the machine wheezes and stumbles, it seems evident that the engine may be at the point of seizing. And the response in Washington is to bolt on more parts.

The evidence of misuse is everywhere. The tax code has become a cipher that men train for years to faintly understand and exploit. Farm policy rewards the rich for not producing a commodity in which we enjoy a world wide advantage. Recoverable carbon based reserves are left in the ground as we bemoan our dependence upon foreign oil. Banks are simultaneously jawboned to lend more money into the teeth of a severe recession and to behave conservatively lest an army of newly empowered bank examiners shut them down. The list is endless.

Left to its own devices, no economy ever behaves in such a self-destructive manner. The root of the problem lies in Washington with a political class that long ago recognized the power of the engine and used that power to further their own ambitions. The question we now face is whether those same men and women can recognize the damage they have done and right it.

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