My own vision. . .is that the forces of the market are just that: They are forces; they are like the wind and the tides; they are things that if you want to try to ignore them, you ignore them at your peril, and if you understand that they are there, working their way, if you find a way of ordering your life that is compatible with these forces, indeed which harnesses these forces to the benefit of your society, that's the way to go. - Al Harberger, University of Chicago
The unhappy coincidence of a presidential election and an economic downturn has resulted in more than the usual share of public idiocy. I feel it is my duty once again to point the accusatory finger at our leaders in the hope that they will be so ashamed that they quit public office without delay and take up lives as wandering ascetics, begging forgiveness and small morsels of food from the people they have wronged.
THE STIMULUS PACKAGE
The idea behind this proposal, which, I should note, has received broad bipartisan support, is that $600 in my pocket is going to somehow restore confidence in the American economy. This is a silly idea. The federal government has proved itself to be an incompetent regulator, millions of Americans hold underwater mortgages, stagflation is in the air, and our record high deficits are only going to get worse when the baby boomer entitlement bomb goes off. . . but don't worry about all that, Best Buy is having a sale on embarrassingly large televisions! Act now, before you're broke again!
Even sillier than the idea itself is Hillary's assertion that "This stimulus shouldn't be paid for," an utterance so devoid of basic economic reasoning that it makes my head hurt. Let me 'splain you something Hillary. Either that $600 is funded by a loan or the government is running a printing press in the basement of the treasury and creating dollars. Whether I fund this policy by repaying a government debt at some future date or watch the value of my savings evaporate today is irrelevant. My future consumption will be reduced. It is lovely of the government to permit me to borrow from myself at such a comparably low rate, BUT I DON'T ACTUALLY NEED THE CASH.
THE HEALTH CARE PROPOSALS
I think we can all agree that it would be a better, happier, more awesome world if the price of healthcare were lower and there were more of it available. Even a basic acquaintance with market theory suggests a simple and obvious avenue for government action: attempt to shift the healthcare supply curve outward.
Unfortunately, all of the reform proposals with which I am acquainted propose the exact opposite. Our wise presidential candidates imply that we should enact massive demand subsidies while imposing price controls on suppliers. The predictable result will be a shortage.
I point these things out not to whine about socialized medicine or government intervention. To the extent that I believe the government should be involved in promoting social welfare at all, I believe that public health and economic stability are at the core of its mission.
I raise these issues because our leaders seem to view markets as somehow optional. In the same way that walking down a railroad track with your eyes closed wont keep you from getting hit by a train, and ignoring markets in the design of policy doesn't makes them go away.
