There has been plenty of economic and business data lately to demonstrate that the economy is slowly on the rise.
Some government officials (and members of the Federal Reserve) seem to want to take credit for this improvement, which is a little like the fabled rooster who believes that his pre-dawn crowing is responsible for making the sun come up.
It would be far more accurate to say that the economy is on the rise in spite of the mis-steps of government regulations and stimulus spending, and in spite of the Fed's excessively easy interest rates and previous rounds of quantitative easing. We've written several previous posts over the past year or more which outline the reasons to believe that.
On the other hand, there is also a segment of the media world -- especially the "conservative" media punditry -- which wants to deny that the economy is improving, in order to prevent the politicians from taking credit for it. In a sense, they are falling for the idea that the roosters really do make the sun rise, and in order to prevent them from getting credit for it, they want to argue that the sun is not really coming up. That is not a good position to take, particularly as the evidence becomes more and more difficult to deny. We've made this point on the pages of this blog in the past as well.
We've also explained that we are in the midst of a very important period of major technological transformation, one that is so big that even government would have a hard time messing it up. However, while it is probably beyond the power of the roosters to prevent the sun from coming up in this case, they may be able to make the sky a lot cloudier than it has to be, and prevent the day from being as bright and spring-like as it normally might have been.
In other words, although government should not get credit for making the economy improve, it can, through tinkering, create obstacles to economic growth. The way it does that is through excessive regulation and taxation, and unpredictable monetary policy. In fact, we do not believe government drives the economy at all, beyond its appropriate role of maintaining a stable rule of law and a stable money supply which enables enterprise to function in a predictable environment.
Below is a recent video clip of Taylor Frigon president and chief investment officer Gerry Frigon discussing some of these concerns, as well as some of the recent economic data.
