OT – We Don’t Need Anyone to Run the World!

[michael]

http://online.wsj.com/article/SB122420352554042529.html?mod=todays_us_opinion

Markets are amazing if you let them work.

Wall Street Journal
By JOHN STOSSEL

Imagine you had never seen a skating rink. I tell you, “I’m going to invite 100 people down to strap blades to their feet and race around as they like.” You say, “That’s insane! Someone must coordinate all those people.”

Yet we know that the skaters’ actions are coordinated, though not through central planning. There are predictable and understandable rules, but within them, people are free. In promoting my interest in avoiding a collision with you, I also promote your interest in avoiding a collision with me.

Economics Nobel Laureate Friedrich Hayek called it spontaneous order. The market system is the leading example. In promoting my interest in gaining through a voluntary exchange with you, I also promote your interest in gaining through voluntary exchange with me.

Like skaters at an ice rink, we trace our way in the economy making decisions for ourselves. It works out pretty darned well. Prices help guide our way.

Most of life works by spontaneous order. It characterizes how we choose our jobs, hobbies, associates, recreation, etc. When politicians try to regulate the process, they usually make life worse.

I try to demonstrate that in my upcoming ABC TV special, “John Stossel’s Politically Incorrect Guide to Politics.” I centrally planned a skating rink, and stood in the center of the ice and shouted through a bullhorn: “Slow down! Turn right. No backwards skating!” It didn’t work. People hated it. Some fell, just as predicted by George Mason University professor Daniel Klein, who came up with the idea.

Had I been directing an economy, politicians would say that I failed because I’m not smart enough. They’d demand that we elect an expert. So I gave the bullhorn to Olympic gold medalist Brian Boitano. He did no better. Even a genius, or an angel, will lack knowledge of the individual skater’s situation. It changes moment by moment. Mr. Boitano and I had no clue who was off-balance, who wanted to speed up, who needed a bathroom break. The skaters each perceived the situation as it happened, and followed their own principles of motion.

Most skaters ignored Mr. Boitano. He told me, “They want to do their own thing.” “Yeah,” replied one woman, “I don’t wanna do it if someone’s telling you what to do.” Freedom is a good reason not to interfere. Still, we’re told that the government must regulate the economy. Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

But governments have regulated and subsidized the housing and financial industries for years. Fannie Mae and Freddie Mac were created to interfere in those markets. Had actual private companies invested in those mortgages, they would have been subject to market checks. But they were not. The results were predictable.

Now we will get a new onslaught of regulation. This intervention will fail and stifle innovation because, as Adam Smith and Friedrich Hayek taught, markets are too complex to manipulate beneficially. Life works best when decisions are bottom up. But pundits have no clue about spontaneous order. Instead, they talk about who will “run America.”

This faith in political solutions thrives in the face of repeated government failure. Big farm bills have raised the price of food and squeezed out small farms. Campaign finance reform made it harder to challenge incumbents. FEMA couldn’t deliver water to hurricane-ravaged New Orleans as well as Wal-Mart did. Medicare has a $35 trillion unfunded liability over the next 75 years.

Yet the media and political class call for more government control. What puzzles me is why citizens don’t act like the skaters we tried to boss around. The skaters wanted freedom. Citizens might desire this too, but the political class assumes they want and need direction.

“It’s like we believe that when one man is chosen to be president, suddenly he rises above all the rest of us.” says the Cato Institute’s David Boaz. “Suddenly politicians can do anything: give us health care, better lives, better jobs. But politicians can’t do most of that stuff.”

“Fortunately,” he adds, “Most of life is outside the government sector.” That’s the part of life that keeps getting better.

Mr. Stossel’s ABC News Special, “John Stossel’s Politically Incorrect Guide to Politics,” airs today at 10 p.m. EST

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

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