Thursday, October 9, 2014

Economic Policy After Obama

It's said that the American people are ready for a different economic policy after the six years of sub-par growth under Obama. That is nice.

Problem is that the American people don't have a clue about what economic policy creates prosperity. Exhibit "A" is minimum wage. The American people are for it.

Problem is that the science is pretty well settled on this, except among a few labor economists. Minimum wage creates unemployment, particularly among uneducated, inexperienced young single males.

But the American people think that, absent robust growth, the way to get a bigger check from their employer is by force. By the government holding a gun to the head of their employer.

Hey, no surprise there. Most Americans earn their living as employees or as government beneficiaries. They do not really live in the market economy. They live in an administered world, the world of the corporate bureaucracy, the government bureaucracy and the client of the powerful patron.

Trouble is that the feudal system got its marching orders centuries ago. It is not subordination but exchange that makes the world go round. It is individuals responsibly trying to serve their fellow humans in market exchange that undergirds our prosperity.

I like to say that the moment that this truth got established beyond a shadow of a doubt was in 1921 when the German General von Seeckt decreed that the German army now needed individual soldiers who were "self-reliant, self-confident, dedicated, and joyful in taking responsibility."

Here's an article listing the five things wrong with the economy. They are:

  1. Poorly enforced trade agreements.
  2. Misguided energy policies.
  3. Burdensome government regulations and taxes.
  4. Corruption and monopolies.
  5. Disincentives to work, poorly run universities and immigration.
Fixing these five problems will go a long way to fixing the slow-growth economy After Obama.

The thing is, all these things are Holy Writ to Obama and the liberals. Energy? We gotta fight global warming! Regulation and taxes? You want unsafe working conditions! Corruption and monopolies? What about those Koch Brothers! Disincentives to work? You got no compassion for the poor and the marginalized!

My point is that we can have a Republican president and Congress that pass legislation to make a start on fixing this, but that won't even make a start on educating the American people to the real source of their prosperity.

The cunning of lefty "community organizer" politics is that you can always angry up people into a froth of rage and hate. Everyone has a complaint against society, from Warren Buffett down to the family of the dead teenager in Ferguson, Missouri.

But the point of the society of responsible individualism is that we agree not to resort to politics to settle our differences. Instead we accept the verdict of the market. Which is short for accepting the verdict of our fellows. Which means that there are no excuses.

The great tragedy of our time is that the very people that advertise their dedication to Peace and Justice are the very people that insist on a political solution to every problem.

But politics is division; government is force. The more politics you have, the less Peace and the less Justice. That's why, in the hyper-political Obama administration division has increased and inequality has risen. Politics sets "us" against "them" and government mostly sides with the powerful and the status quo.

Still, there is only one thing to do, and that is to make a start.

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