With the approaching elections, we are being treated to the expected political attack by Republican candidates — that President Obama has mismanaged the economy. In fact, within one day of Obama’s taking control over the presidency, Republicans were already railing against his socialism and his out-of-control federal spending, debt, and taxes, and the dismal state of the economy.
Never mind, of course, that this was the standard political ploy of the Democrats during the entire 8 years of the Bush administration. Bush and his Republican cohorts, they steadfastly maintained, were mismanaging the economy. Government spending and federal debt under Bush soared, and it was during his administration that the housing and mortgage crisis hit.
In fact, I remember seeing polls during the Bush years in which people were saying that they trusted the Democrats more than the Republicans with respect to managing the economy. But today things are different. People are expecting a Republican resurgence in November owing to Obama’s mismanagement of the economy.
It’s really just one great big game. The party that isn’t in office exclaims against the party that is in power, saying that it’s mismanaging the economy and asking that voters return it to power. Then, when that party gets back into power, the tables become turned. The ousted party immediately goes on the attack, claiming that the party in power is mismanaging the economy and asking voters to return it to power.
What’s the real solution to America’s economic woes?
It lies in asking ourselves a fundamental question: Should the role of government in a free society be to manage an economy?
The answer is: No, absolutely not. The government has no more business managing an economy than it does managing people’s religious activities.
After all, what is an economy? It’s really just people sustaining and improving their lives and interacting with others in economic matters. It’s an intricate and complex process that involves countless people producing goods and services and exchanging them with others.
So, when the president purports to manage the economy, what he’s really doing is attempting to manage, control, direct, or influence the economic decisions of hundreds of millions of people, each of whom is trying to plan and direct his own affairs. In other words, one man — or group of people in the federal government — purports to plan, in a top-down, command-and-control manner, the economic decisions of countless people, a phenomenon that the Nobel Prize winning libertarian economist Friedrich Hayek called a “fatal conceit.“ It cannot be done, and in fact all that it produces is crisis and chaos.
The problem Americans face is not that President Obama is mismanaging the economy. The problem is a systemic one, one that delegates to the president the authority to manage the economy.
The solution to America’s economic woes lies not in getting better people in public office who can better manage the economy. The solution lies in prohibiting government officials from managing the economy. Managing the economy is not a legitimate function of government in a free society, and in fact is the root cause of a nation’s economic woes.
The French have a term for this: “Laissez faire, laissez passer.“ Let it be, let it pass. Leave people free to manage their own economic affairs. Separate economy and the state in the same way that our American ancestors separated church and state.