Wednesday, September 15, 2010

Madison on Economic Uncertainty

James Madison understood economic uncertainty and its cause long before - and much better than - many today. That's the advantage of focusing one's mind on reality, particularly with regard to human nature. In Federalist 62, he writes:
“What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed?

What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government?”
If the willfully clueless in D.C. absorbed only this one insight from Madison we would be much further along the road of a long-delayed recovery.

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