Economy

This Is Not the Financial Crisis

There are valid comparisons with 2008, but there are some important distinctions.

Harold Hutchison · Apr. 1, 2020

Many Patriots worry (rightly, to some degree) about the $2.2 trillion relief bill passed to address some of the economic fallout from the Wuhan coronavirus. Some classify that aid package in the same vein as the bailout in the wake of the 2008 financial crisis. While the big money is something to be worried about, we should keep some important distinctions in mind.

First of all, unlike the financial crisis, the pandemic came about largely through the misconduct of a factor outside the United States — the ongoing cover-up from the “People’s Republic” of China. How bad was this cover-up? If China had acted more appropriately, one study says the severity of the COVID-19 outbreak could have been reduced by 95%.

Unfortunately, because of the cover-up, we have a pandemic on our hands, and to slow its spread, we have had to largely shut down the country for at least six weeks (to April 30), possibly longer in some places. These decisions are hurting millions of Americans through no fault of their own.

One can argue that we’re seeing the most massive and widespread regulatory “taking” in this country’s history, and under the Fifth Amendment, takings require “just compensation.” So, in one sense, Congress’s relief package was part of a constitutional duty to the American people.

Another point to keep in mind: Since this damage was caused by Beijing, it now becomes imperative that the costs of keeping Americans afloat come out of Beijing’s hide economically and geopolitically, but at a minimum in terms of public perception.

This is a crucial point. The financial crisis came about because of bad Democrat regulations followed by poor judgment on Wall Street. Thus, the Troubled Assets Relief Program was money changing hands among the very people who caused the problem in the first place. It was a moral hazard, and one from which the country is still struggling to recover.

The other big difference between 2008’s financial crisis and the COVID-19 pandemic is that in this case, we’re going to be making some long-lasting and long-needed adjustments. We will be reducing our dependence on China for a lot of things, from medical equipment and pharmaceuticals to manufactured goods. More Americans will also see more clearly the utter and total lack of reputability of the Beijing regime. We will also see regulations become less burdensome. The loosening that began as an emergency measure will not be easily reversed. Unfortunately, neither will some of the tightening.

The after-action will also require a plan to bolster our infrastructure — especially for medical treatment, but also for everything from the demands of more telecommuting to streaming entertainment at home. We also need to update it for the increased manufacturing that will come home and to rebuild stockpiles that were allowed to dwindle. What President Donald Trump started out of a desire to end America being screwed in trade deals is going to accelerate because restoring our manufacturing base has become a matter of life or death.

No, this will not be cheap. But the fact is, unlike the financial crisis, America seems to be willing to take the steps to fix the vulnerabilities and make the necessary changes to withstand the next outbreak. This will be a good thing over the long term.

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