Food for the Soul
2/25/09 at 12:31 PM 0 Comments

David Cowan comments on economic stimulus plan

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In the Market for Some Peace of Mind?

That'll be 787 billion dollars. Cash, check, or credit?

David Cowan
David Cowan

In the few days that have passed since President Obama signed the economic stimulus bill into law, many Americans have begun to wonder how this massive government spending will benefit their own lives. Not much, according to economic expert David Cowan. In fact, though some speculate that the price tag is high enough to finance 13 wars in Iraq and Afghanistan, the end result of the bill can be nothing more than a temporary (and very expensive) feeling of relief.

David Cowan has worked as a journalist, editor, and bank executive in Europe and North America for organizations such as Financial Times, Euromoney,and the World Bank Group in Washington, D.C. His perspective on the current financial crisis stands in stark contrast to the recent stump speeches and the alarmist reactions of many in today's media. "People keep making these allusions to the Great Depression, and I simply don't think we are in that situation. There will be enough resilience in capitalism and the economy to bring us back-if we let the free market work. I think this current mess is more of a contraction in the economy. Maintaining the equilibrium is a painful but necessary process," Cowan states.

Though there is no doubt that the U.S. is experiencing a recession, Cowan challenges the assertion made by any politician that the government can create enough jobs to reverse the current downward trend. Sometimes, he says, there is nothing that can be done except to get on with life, bide our time, and wait until things turn around-just as they have done time and again when the free market has purged the ineffective or poorly run business and cleared the way for new opportunities.

"It's only the creation of wealth that will get things moving again. The truth is that there are people in the economy who are finding opportunities. They are finding wealth. Yes, it will be very difficult for those who have lost their jobs and their homes. As for the rest of the country, 787 billion dollars is an awfully high price tag for a package that is more about generating peace of mind than generating wealth," Cowan states. "Politicians and bureaucrats will get their paws on the money and apply it to the causes that interest them. These may be good causes, but, generally, they don't generate wealth."

Who, then, does generate wealth? It is the people that a free market economy ultimately rewards-the individuals and companies that step up to the plate to meet demand, bring innovation, and invest wisely. Cowan insists that it is those people, not the government, that will begin paving the way back to prosperity.

"In a healthy economy, these jobs come about spontaneously. Does a massive social employment program actually solve your problem?" he asks. "My feeling is that the approach President Obama and the U.S. Congress have taken is a bit like pulling off a band-aid slowly instead of just ripping it off and getting it over with. This will only prolong the pain."

With or without a stimulus plan, many companies are already assuming 2009 will be a write off, while hoping cautiously that we might begin to see recovery next year. Cowan states that businesses have been taking actions in the last four months to equip themselves to ride through this current economic storm, and this effort will do more to improve our economy than all the talk from government quarters.

David Cowan is also the author of Economic Parables, available from Paternoster. For more information about David Cowan, visit  

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