Sleep Talking

Sweet dreams are made of this
Who am I to disagree?
I travel the world
And the seven seas
Everybody's looking for something
--Eurythmics

President Obama says he won't sleep until every American who wants a job has a job. He better have plenty of No Doze on hand.

Our historic patterns of borrowing and spending has created excessive supply and a state of overcapacity. If left alone, market forces correct such imbalances by reducing consumer demand (i.e., less borrowing and spending) which, in turn, lowers supply. Excess capacity must be retired.

This means jobs will be lost in the transition to efficiency. Over time, however, the general decline in prices (including wages) drive the system toward full employment as employers purchase labor at lower prices.

The government wants to do the opposite. Bureacrats seek to extend our spending binge and prop up excess supply. By borrowing and spending more, they merely prolong and deepen the pain. High unemployment rates are certain to persist.

A key lesson from the Great Depression is that unemployment rates didn't decline despite all government interventionary attempts to lower the jobless rate. We exited the 1930s decade at the same 20% unemployment rate that marked the beginning of the New Deal in 1932.

As it stands, it will be this administration's policies that will bring sleepless nights to millions of Americans as they worry about their persistent state of unemployment.