True Federalism: It’s America’s People Who Will Restart Economy

Then there s occupied West Germany, where even three years after the war the economy was in ruins and as our Amity Shlaes once wrote in the New Yorker citizens were fighting over individual potatoes. The currency was worthless, credit was scarce, factories idle, and shop windows bare. People were hoarding. Then a visionary economics minister of the occupied zones, Ludwig Erhard, had his epiphany.

Erhard went to General Lucius Clay and proposed replacing, in a fell swoop, all the currency in the country with a new currency called the Deutsche Mark and lifting wage and price controls. Herr minister, the general said, my advisers tell me it won t work. Herr general, Erhard said, my advisers tell me the same thing. The two proceeded, despite the experts.

The economy restarted overnight. Banks started lending, factories started humming, and the German economic miracle began. We wouldn t want to make too much of either example. The German event records plenty of inequities. In some ways, Mr. Trump incentivized a boom like the 1920s. Both, though, responded to frozen economies with free market methods.

via www.nysun.com

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