President Obama followed up on his State of the Union address last Wednesday by visiting the House Republican retreat in Baltimore last Friday. Not only did he take questions from the assembled GOP Congressional Representatives, he also allowed TV cameras in to film the whole event. I watched a good bit of it and it WAS fascinating political theater, but how most felt about it in terms of winning and losing ultimately depended on whose side you tend to root for. The Republicans were very direct in their questioning and the President gave as good as he got, throwing in some charming personal comments here and there, such as his commendation to Wisconsin’s Paul Ryan for his “beautiful family.”
When the polls came out at the first of this week, the President’s personal approval rating was back above 50% for the first time in a few weeks. Presumably, this was why the decision was made to dispatch him to pay a similar visit to the Democrat Senators at their strategy session in the Newseum.
CNN’s Dana Bash reported that Harry Reid picked the 8 Senators who were given time to question the President. Arkansas Senator Blanche Lincoln was #3. In a windy, meandering introduction in which she pseudo-lectured the President about the lack of fiscal responsibility that his party and hers have demonstrated (in which she participated by not voting against the health care monstrosity or the TARP stimulus), she offered the following sentiment:
“I visited with a constituent yesterday, good Democrat, small business owner, who was extremely frustrated — extremely frustrated because there was a lack of certainty and predictability from his government for him to be able to run his businesses…in terms of where we are going, what can we tell the people in terms of predictability and certainty in getting this economy back on track? How are we going to do that?” (emphasis mine)
Senator Lincoln is, in fact, partially correct in what she states here. Constant government intervention into the economy does not contribute to the well-being of the country, but at best, demonstrably makes investors and shareholders nervous about the effect of new regulation and reticent about further risk. At worst, government intervention pushes business further into failure since government does few things well and does not have a particularly strong track record of turning a profit, let alone engendering real economic growth.
If all Blanche Lincoln was arguing is that government should stay out of the way and let businesses rise or fall on their own merits, we could hold hands around the campfire. But the final part of the quote above displays where her true faith lies in the end, much as she tries to position herself as an “independent.” (Read the transcript of the whole event, including Blanche Lincoln’s question, here.) For she is clearly implying that only government can steer the economic ship in the direction it needs to go, which is “predictability and certainty.”
Far too many of our Senators and Representatives on both sides of the aisle regularly exhibit a stunning ignorance of the basic principles of Economics 101. This is, perhaps, to be expected when a majority of them have never run a business and are either career politicians or attorneys. But it doesn’t mean we have to grow accustomed to it or that this status quo needs to continue.
Adam Smith, author of the foundational economics text The Wealth of Nations, understood that long-term “predictability and certainty” are impossible on any level in this life and that government is the worst possible locus of our hope for these unattainable ends. But more importantly, he passed on to future generations the wisdom that has engendered the greatest prosperity ever known to man: free-market economics. Here is what Smith wrote:
“Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it… He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”
In light of Blanche Lincoln’s postulations, the last sentence of the Smith quote is particularly enlightening. For are we not constantly reminded of what glorious intentions our Democrat friends have for the well-being of this country? Yet, they are all too seldom held to account when their tinkering plunges the country further over the economic precipice on which it was teetering when they took control.
Oily liberals decry the selfishness of the free marketeer that leads him to pursue his dreams, laying his hard-earned capital on the line in the process of starting a small business, opening a franchise or launching a product line. Oliver Stone makes millions creating a Gordon Gekko caricature that seethes, “Greed is good”, as though anyone is truly happy in poverty. Can we avoid the inescapable fact that a poor man has yet to create a job for someone else or provide the means for another man to feed his family?
Thomas Sowell, a modern incarnation of Adam Smith, writes the following:
“In some respects, governments are able to assemble vast amounts of knowledge, but the kind of knowledge involved is often in the form of statistical generalities or verbal generalities known as ‘expertise,’ while many economic decisions depend crucially on highly specific knowledge of particular things.”
It is exactly this specialized knowledge that government often lacks appreciation for and which is impossible to create, save for the innumerable specific demands created by free consumers who seek out and find the goods and services that meet their daily needs. Blanche Lincoln fails to grasp this or she would seek to reward hard work and economic ingenuity, rather than mouthing platitudes in a quest for economic predictability while voting to plunge the country deeper into a fiscal morass.