Presidents Can't Manage the Economy
By John Stossel
Wednesday, February 20, 2008


The presidential candidates have been repeatedly asked how they would "manage the economy." With the exception of Ron Paul, every candidate has accepted the premise that this is something the president of the United States should do.
Or can do.
Nonsense.
Democrats act like the president is national economic manager. Republicans pay lip service to free markets, tax and spending cuts, and less regulation -- before proposing big programs to achieve "energy independence," job training and a cooler climate.
John McCain says it's important for government to do something "to sustain our leadership in manufacturing". Why? Manufacturing jobs are no better for America than other jobs. Some argue that they are worse. How many parents want their children to work in factories rather than offices? Increasing service jobs in medical, financial and computer sectors while importing manufactured goods doesn't hurt America. It helps America.
The candidates see the global economy as an arena in which countries compete against one another -- an economic Olympiad with winners and losers. Politicians love to promise they will keep America No. 1, as if that matters in a worldwide marketplace.
America as a nation does not compete against China or South Korea or Japan. American companies compete against companies in other countries, but that's something else. The purpose of production is consumption, and American consumers prosper when foreigners compete successfully with American companies.
A president who sees the global economy as a competition among nations will be tempted to intervene on behalf of the "United States" and create "good American jobs." That's how governments mess up economies.
McCain says, "It is government's job to help workers get the education and training they need for the new jobs". Mike Huckabee (who glories in public-works projects as a job-creation machine) and <A title=http://tinyurl.com/2srryu href="http://tinyurl.com/2srryu">Barack Obama talk in similar terms.
That hardly shows confidence in the free market, which, if allowed, would train and educate workers just fine. But it shows misplaced confidence in the federal government, which, as journalist Jim Bovard has shown, has an unbelievably bad track record at doing it. The endless list of programs, like the Manpower Development and Training Administration, Comprehensive Employment and Training Act, Job Training Partnership Act, STIP, BEST, YIEPP, YACC, SCSEP, HIRE, etc., wasted billions and "distorted people's lives and careers by making false promises, leading them to believe that a year or two in this or that program was the key to the future. Federal training programs have tended to place people in low-paying jobs, if trainees got jobs at all." .
Sen. Hillary Clinton told The New York Times recently, "I want to get back to the appropriate balance of power between government and the market. You try to find common ground, insofar as possible. But if you really believe you have to manage the economy, you have to stake a lot of your presidency on it."
Notice that she equates government power and market power. That is absurd. "Power" in a free market means success at creating goods and services that your fellow human beings voluntarily choose to buy. Government power is force: the ability to fine and imprison people.
Politicians who talk about managing the economy ignore the fact that, strictly speaking, there is no economy. There are only people producing, buying and selling goods and services. Keep that in mind, and one realizes that government action more often than not interferes with the productive activities that benefit everyone. When politicians propose regulations to fix some problem, they should ask if some earlier intervention created the problem and if the new regulations will make things worse. The answer to both questions is usually yes.
The economy is far too complex for any president -- no matter how smart -- to manage. How can politicians and bureaucrats possibly know what hundreds of millions of individuals know, want and aspire to? How can government employees fathom what trade-offs to make in a world of scarce resources?
They can't. That's why free people are more prosperous than unfree people.
Presidential candidates should promise to keep their hands off the economy.

__________________
An informed voter scares the Goverment lackeys.

An American first and always a Conservative.

Go Sooners

What is ignored is the role government has in managing the ecology, of which the economy is a subset.

One manages the ecology to prevent harm. For example, harm from pollution.

The question is what economic mechanism to employ. Market and pricing. Or mandates.

As people are part of the ecology, they often seek to profit and as a result produce harm, such as their creation of fictions that are traded as if real goods, sometimes with best of intents, and other times not, with the latter called fraud.

And there is the matter of slavery, in various forms, another activity in the ecology.

The place where these things are often measured are in the economy. The frauds show up as trading failures in the economy. The slavery in various forms have impacts in the economy as do the harms of pollution. And the profits that motivate them all.

The economy is sort of like the temperature of a sick person, and when the temperature is too high or too low, we know that the person will die if no action is taken, so one of the first things done is to control the temperature, even before going to the root cause. In the case of flu with a steep temperature spike, merely cooling them down prevents harm while the flu is fought off by the body. For the economy, sometimes merely treating the symptom, illiquiditiy for example, will allow the economy to correct itself without major harm occuring.

I do think that economists too often think that the body temperature is the only measure of a person, with some believing that the temperature can be controlled to improve the person, and others believing that it should never be controlled. I think both are wrong because they don't see the bigger picture, the economy is just a part of the bigger picture.

Oh, yeah, to the title, the president doesn't have the power to do much, other than lead, or administer the laws passed by Congress.

As both Bush and Clinton has demonstrated, merely demanding that Congress do something is insufficient and sometimes quite unproductive.

Obama however has been offering to lead the people so that together things can be accomplished. Lots of people pressuring their Congress persons can get Congress to effect change to the rules for living within the ecology, and as the economy is the most common measure of what goes on in the ecology.

Blah blah blah. This egalitarian crap is getting rather dull.


The truth of the matter is. Government can protect the Environment and the public interest by a very simple set of laws laid forth in the Constitution.

Sound Monetary Policy
Property Rights

__________________
"It is the Right of the People to alter or abolish the Government"
Declaration of Independence
"Never trouble another for what you can do for yourself."
Thomas Jefferson
"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."
Milton Friedman

Interesting what you consider protecting the environment.

Have you bought any Atlantic Cod or Blue Fin tuna lately; those were so abundant in 1800 you could fish for them from a dingy or off a dock. Not to mention whaling in small boats near shore. And the Salmon runs.... And Passenger Pigeons filled the skies.

And how quickly do you want to get your lifetime quota of dietary mercury; thanks to Ohio coal power plants and Reagan-Bush-Bush, its a good thing you can't afford to eat Blue Fin often because you would end up with madhatter.

Those following your prescription have failed repeatedly to protect the environment or the people from the greed of the people and their agents, the corporations. It really takes a collectivist organization to really lose all sense of morality and social conscious so that men can kill other men without any sense of shame and protest their innocense.

Of course, if you don't like egalitarianism, don't complain when some corporation decides that you and your family are less important that the corporation's profits. You and your family don't count in the economy.

America has not had protection of property rights since the early 1800s.

__________________
"It is the Right of the People to alter or abolish the Government"
Declaration of Independence
"Never trouble another for what you can do for yourself."
Thomas Jefferson
"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."
Milton Friedman