It's exciting that the world is so excited about Barack Obama. I'm excited, too. That he achieved the presidency says something good about America.
But the excitement also frightens me. It reinforces the worst impulse of the media and political class: the assumption that all progress comes from Washington. In a free society, with constitutionally limited government, the president would be a mere executive who sees to it that predictable and understandable laws are enforced. But sadly, the prestige and power of the presidency have grown, and liberty has contracted. That is not something to celebrate.
The infatuated chattering classes now demand "action" on the economy. They use positive words like "bold steps." The insufferable New York Times suggests the choice is "between a big-bang strategy of pressing aggressively on multiple fronts versus a more pragmatic, step-by-step approach .... " There is endless talk about how FDR ended the Great Depression and how Obama will apply similar "stimulus."
Please. FDR's "bold" moves didn't end the Depression. They prolonged it by discouraging capital investment. Hoover and Roosevelt turned what might have been a brief downturn into 10 years of double-digit unemployment.
Now Obama says, "we don't have a moment to lose," and he and the Democrats insist that government must unionize most of America by passing "card check" and taxpayers must throw even more money at American automakers.
This is the conceit of what Thomas Sowell calls "the anointed". The politicians know best how our money should be spent. The "road to serfdom" is paved with such good intentions.
Obama promises:
"We will change the world ... There is nothing we can't do, nothing we can't accomplish if we are unified".
Who is this "we" politicians always cite?
We can change the world for the better if "we" means hundreds of millions of free people pursuing their interests, inventing, building, parenting, helping.
But the politicians' "we" is different. It means government. "We" will take your money by force and order you about. A democracy can become the tyranny of the majority. That's no way to create prosperity.
Obama is an extraordinarily talented man. But there is one thing he can't successfully do: ignore the laws of economics. No one can do that. That's why we call them "laws."
Ludwig von Mises wrote that once the science of economics emerged in the late Eighteenth Century, people began to realize "there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success, in precisely the same way as they must take into account the laws of nature. This realization ... led to the program and policies of [classical] liberalism and thus unleashed human powers that, under capitalism, have transformed the world."
The resulting abundance, which so many people take for granted without understanding its source, allows them to believe that a new president can "stimulate" us out of recession.
But we cannot raise wages or create jobs or eliminate poverty by executive order. We can do so by freeing people to save and invest and accumulate capital. We can't make medical care universal and inexpensive by legislative fiat. But we can approach that goal by permitting a free market in medicine to work.
Government is force, not eloquence. And force is an attempt to defy economic logic. The consequences are often opposite of those intended. "A subsidy for medical insurance increases the demand for services and raises prices. A price ceiling makes those services less available. A floor under wages makes jobs for unskilled workers more scarce, as employers find it a losing proposition to hire them. A subsidy to production means too much produced relative to something else consumers want. A trade restriction lowers living standards at home and abroad," writes Sheldon Richman on the Foundation for Economic Education website.
What will happen when the unintended consequences hit? F.A. Hayek warned that a government serious about enacting its economic plan must be prepared to use heavy-handed measures. Is that what we want?
I fear that today's "forceful actions" will not only be a painful assault on our freedom, they will exacerbate whatever economic troubles we face.
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