Columnist.
When my wife was a liberal, she complained that libertarian reasoning is coldhearted. Since markets produce winners and losers -- and many losers did nothing wrong -- market competition is cruel. It must seem so. President Obama used the word "fair" in his last State of the Union address nine times.
A child leaving home alone for the first time takes a risk. So does the entrepreneur who opens a new business. I no more want government to prevent us from doing these things than I want it to keep us in padded cells. Everyone has a different tolerance for risk. One person takes out a second mortgage to start a business. Another thinks that sounds nerve-racking, if not insane. Neither person is wrong. Government cannot know each person's preferences, or odds of success.
The human brain is torn between simple intuition and the more complex hard work of figuring out the unintended consequences of any policy. Who doesn't like thinking about trees and greenery and happy animals? Who doesn't want to see steps taken to protect those things, all else being equal? But all else is not equal. Civilization doesn't work when central planners treat each tree as if its value is infinite. Politicians specialize in convincing you that, with their help, you can have your cake and eat it, too. The idea of a new "green economy" that is both clean and rich with jobs became popular under Bill Clinton's administration, thanks in large part to a compliant media and Vice President Al Gore. But anyone who understands economics knows that President Obama's green jobs initiative is snake oil.
Instinct tells us to fear poison. If our ancestors were not cautious about what they put in their mouths, they would not have survived long enough to produce us. Unfortunately, a side effect of that cautious impulse is that whenever someone claims that some chemical -- or food ingredient, like fat -- is a menace, we are primed to believe it. That makes it easy for government to leap in and play the role of protector.
We spend too much time waiting for orders -- and money -- from Washington. The collapse of the housing bubble gave politicians a license to do what they wanted to do all along: spend. The usual checks on extravagance, weak as they are, were washed away. Budgets? We'll worry about that later. Inflation? We'll worry about that later. As I point out in my brand new book, "No, We Can't: Why Government Fails -- and Individuals Succeed," a true free market doesn't require much. It's not like an orchestra in need of a conductor. What it needs is property rights, so no one can take your stuff. Then people trade property to their mutual advantage. Resources move around without the need for a central, coercive government telling people which resources should go where -- or telling them that they must get permission to do what they think is advantageous.
I'm suspicious of superstitions, like astrology or the belief that "green jobs will fix the environment and the economy." I understand the appeal of such beliefs. People crave simple answers and want to believe that some higher power determines our fates. The most socially destructive superstition of all is the intuitively appealing belief that problems are best solved by government. Opinion polls suggest that Americans are dissatisfied with government. Yet whenever another crisis hits, the natural human instinct is to say, "Why doesn't the government do something?"
Pssst. Want to buy some Stossels? They're my own currency with my face on them. Why should you trust them? Because I promise to redeem them for gold. And I'm reliable. I have money in the bank and a job that brings in more than I spend. By contrast, the politicians who back American currency run an unsustainable deficit. The Federal Reserve prints so much money that since it opened its doors in 1914, the dollar has lost more than 90 percent of its value.
Politicians say they "create jobs." In fact, only the private sector generates the information needed to create real, productive jobs. Since this current post-recession job recovery is the slowest in 80 years, you'd think that even know-it-all politicians would want to sweep away the labyrinth of government regulations that hinders job creation. Successful job creators like Dallas Mavericks owner Mark Cuban and Staples founder Tom Stemberg tell me there are so many new rules and taxes today that it would be difficult, if not impossible, for them to create the thousands of jobs they once made.
President Obama says he want to make society more fair. Advocates of big government believe fairness means taking from rich people and giving to others: poor people; or people who do things politicians approve of, like making "green" energy equipment (Solyndra); or old people (even rich ones) through Social Security and Medicare. The idea that government can "make life fair" is intuitively appealing to people -- at least until they think about it. I'll try to help.
"If you have 10,000 regulations," Winston Churchill said, "you destroy all respect for law." He was right. But Churchill never imagined a government that would add 10,000 year after year. That's what we have in America. We have 160,000 pages of rules from the feds alone. States and localities have probably doubled that. We have so many rules that legal specialists can't keep up. Criminal lawyers call the rules "incomprehensible." They are. They are also "uncountable." Congress has created so many criminal offenses that the American Bar Association says it would be futile to even attempt to estimate the total.
Now that Mitt Romney is likely to be the Republican nominee, we can expect new attacks on his "vulture capitalism." That's how Rick Perry characterized his private equity work. Newt Gingrich's supporters ran an ad about Romney's firm, Bain Capital, that said, "Their greed was only matched by their willingness to do anything to make millions in profits." Give me a break. "Greed" means you want more for yourself. Fine. If you obtain it legally, without force or privilege -- say, by buying a business and making it more efficient, or shifting resources to where consumers prefer them -- that is a good thing. "Creative destruction" makes America richer.
Unlike Bill Clinton, President Obama admits he inhaled!. "Frequently," he said. "That was the point." People laugh when politicians talk about their drug use. The audience laughed during a 2003 CNN Democratic presidential primary debate when John Kerry, John Edwards and Howard Dean admitted smoking weed. Yet those same politicians oversee a cruel system that now stages SWAT raids on people's homes more than 100 times a day. People die in these raids -- some weren't even the intended targets of the police.
Want to open a business in America? It isn't easy. In Midway, Ga., a 14-year-old girl and her 10-year-old sister sold lemonade from their front yard. Two police officers bought some. But the next day, different officers ordered them to close their stand. Their father went to city hall to try to find out why. The clerk laughed and said she didn't know. Eventually, Police Chief Kelly Morningstar explained, "We were not aware of how the lemonade was made, who made the lemonade and of what the lemonade was made with."
Imagine this family budget: Last year, you earned $24,700. But you spent $37,900, incurring $13,300 in debt, and you were already $153,500 in debt. So you say, "I promise I'll spend $300 less this year!" Anyone can see that your cutback is pathetic and that you need to spend much less. Yet if you add eight zeroes, that's America's budget.
President Obama said in his State of the Union speech, "We've already agreed to more than $2 trillion in cuts and savings." That was reassuring. The new budget he released this week promises $4 trillion in "deficit reduction" -- about half in tax increases and half in spending cuts. But like most politicians, Obama misleads. Cato Institute economist Dan Mitchell cut through the fog to get at the truth of the $2 trillion "cut."
In the Declaration of Independence, Thomas Jefferson called the pursuit of happiness an unalienable right. This was a radical idea. For most of history, most people didn't think much about pursuing happiness. They were too busy just trying to survive. Then came the liberal revolution based on the idea of individual freedom. Only then did they start thinking that happiness might be possible on earth.
With an election approaching and at least some Americans upset about irresponsible spending, the president has finally expressed a political interest in cutting something. He says the Pentagon will spend "only" $525 billion next year. That's slightly less than the current $531 billion. A cut is good, but this will barely dent the deficit. We could save much more if America assumed a military policy designed for defense rather than policing the world. Presidential candidate Ron Paul gets criticized for advocating that. Paul's opponents, including many of my colleagues, complain about his "isolationist foreign policy."
Has Barack Obama learned nothing in three years? Last night, during his State of the Union address, he promised "a blueprint for an economy." But economies are crushed by blueprints. An economy is really nothing more than people participating in an unfathomably complex spontaneous network of exchanges aimed at improving their material circumstances. It can't even be diagrammed, much less planned. And any attempt at it will come to grief. Politicians like Obama believe they are the best judges of how we should conduct our lives. Of course a word like "blueprint" would occur to the president. He, like most who want his job, aspires to be the architect of a new society.
Simple answers are so satisfying: Green jobs will fix the economy. Stimulus will create jobs. Charity helps people more than commerce. Everyone should vote. Well, all those instinctive solutions are wrong. As Friedrich Hayek pointed out in "The Fatal Conceit," it's a problem that in our complex, extended economy, we rely on instincts developed during our ancestors' existence in small bands. In those old days, everyone knew everyone else, so affairs could be micromanaged. Today, we live in a global economy where strangers deal with each other. The rules need to be different. Hayek said: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
It's election season, and so once again people look for heroes. Is Ron Paul one? Maybe. He's fought a long, lonely battle to limit the power of government. As government grows, I yearn for champions of freedom who fight back. Rep. Paul has done that. But it's a mistake to look for heroes in politics. It's too ugly a business. My heroes are people like Milton Friedman, F.A. Hayek and Ayn Rand. Damn -- they're all gone. Here are some other champions of liberty you might not know about: Alfred Kahn was a bureaucrat who, under President Carter, managed to kill off the Civil Aeronautics Board and Interstate Commerce Commission. By bringing freer markets to transportation, he saved Americans billions of dollars.
