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at making projections into the future is not a good one. We should think twice before trusting economists to know what they are talking about in this regard.

We should be sceptical of government economists, especially the central bankers. Governments usually shift the blame for their mistakes onto capitalism. Hence, we are unlikely to see politicians blame former Chairman of the Fed, Alan Greenspan, for his excessively loose monetary policy. Many believe that by keeping interest rates too low and encouraging artificial increases in wealth through speculative bubbles, Greenspan is guilty of contributing to the problem, especially in the housing sector. But you won't be seeing a push to reform monetary policy. That would be against the interests of our representatives, who must shift the blame to unfettered greed' and free-markets if they are to be re-elected.

It should be evident by now from the lackluster performance of bailout packages and interest rate cuts that the economists who said these measures would prevent a recession were wrong. A recession is coming, whether we spend $1 billion or $1 trillion of taxpayer money.

What politicians should be doing now is staying out of the way, instead of creating uncertainty in markets and thereby prolonging the agony. One of the important lessons from the 1930s is that regime uncertainty' can make matters worse, converting a recession into a depression. Robert Higgs, in his "Depression, War and Cold War", observes that instead of allowing businesses and individuals to adjust to the changed economic environment of their own accord, political leaders inadvertently instilled a lack of confidence among private investors.

In short, we have more to fear from the drastic measures taken in recent months than from the economic crisis itself. If we allow governments to seize even greater powers under the pretence of saving us from disaster, it is certain that future generations will live to regret what is being done now. What we need to do is take a deep breath and stop panicking. This is not the end of the world.

Learn more about this author, Sukrit Sabhlok.
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