Blames feds for crisis, derides U.S. spending

By Jay Fitzgerald | Wednesday, February 25, 2009 |

Fidelity’s Edward “Ned” Johnson jumped into the controversial debate over President Obama’s “New Deal II” and what Johnson called government “make-work projects.”
Without naming names, Johnson praised the administration’s effort to make economic recovery its top priority, saying it was “admirable.”
But Johnson, sounding like he’s never been a big fan of the original New Dealers from the 1930s, warned of too much government involvement in the economy and indicated Fidelity is beefing up its government-affairs unit to fend off possibly burdensome new regulations.
“We can only hope that the government’s cure doesn’t further sicken the patient,” Johnson wrote in his annual update on Fidelity’s performance over the past year.
“During the ’30s, Congress - with guidance from the president and the same kind of good intentions - shifted the country’s cash flow away from productive businesses to government make-work projects, which most likely prolonged the Great Depression,” wrote Johnson, arguably Boston’s most powerful business executive.
As for the financial-system crisis, Johnson also took a somewhat anti-government conservative view toward its causes, saying “this climate was caused by many well-intentioned policies - stimulated by individuals at high levels in government and sanctioned by regulatory structures.”
Those policies helped make “money ridiculously easy to obtain and business people eager to comply with the policies,” Johnson wrote.
"[The] policy [of my country] is, to leave their citizens free, neither restraining nor aiding them in their pursuits. Though the interposition of government, in matters of invention, has its use, yet it is in practice so inseparable from abuse, that they think it better not to meddle with it." --Thomas Jefferson to M. L'Hommande, 1787. ME 6:255

"Having always observed that public works are much less advantageously managed than the same are by private hands, I have thought it better for the public to go to market for whatever it wants which is to be found there; for there competition brings it down to the minimum of value. I have no doubt we can buy brass cannon at market cheaper than we could make iron ones." --Thomas Jefferson to William B. Bibb, 1808. ME 12:107