The pundits are bewildered over the public’s apparently contradictory response to President Clinton during his recent troubles. Most people have a low opinion of his character. Yet at least 60 percent of those polled think he’s doing a terrific job and should not resign. How can this be?
Assuming the polling results are accurate, it may be possible to make sense of this strange combination of opinions. First, we can dismiss the theory that most Americans are cynics who care about nothing but money. Of course, they do value the economic well-being of themselves and their families. No one should object to that. Contrary to the pundits, who make their living writing and chattering about government, the world does not revolve around Washington, D.C. The rest of us know there are more important things than government.
Nevertheless, Americans do think character is important. That’s why they frown on the President’s admitted moral lapse.
What needs explaining is the connection between the good economy and the President’s positive job-performance rating. People assume that if the inflation and unemployment are low and incomes are rising, the President deserves credit. Why?
The main reason is that most people went through government-run schools. Those schools repeatedly and self-servingly teach children that the government is responsible for the economic health of the nation. Although the federal government has been meddling in our private economic activities for well over a century, the explicit idea that it is the steward of the economy goes back to the Great Depression of the 1930s. That calamity supposedly proved that government is the glue that holds the economy together. As a result, since the days of Franklin Roosevelt, Washington has openly assumed responsibility for all economic matters. Planners and administrators came to the capital in droves beginning in 1933 and found an abundance of work. When World War II came along, they found even more to do. The restoration of peace did not send them packing. The agencies they ran were expected to maintain full employment, manage the money supply, calibrate the level of taxation and spending just right, and do all the other specialized tasks that a great economy couldn’t do for itself. That was the theory anyway. Only in recent years has confidence in government’s stewardship begun to wane.
So no one should be surprised that today’s generations believe government is at the center of everything or that the President deserves credit if no major economic problems are evident. That’s all they’ve heard since they were old enough to understand the language.
The problem is that the story is untrue. The Great Depression was the government’s fault. A prime culprit was the Federal Reserve, which was set up 16 years before the 1929 stock market crash. The government’s subsequent meddling only made things worse, turning what might have been a brief recession into a cataclysmic event.
Presidents, and government in general, don’t make the economy perform. The economy is people engaging in production and exchange for mutual gain. If government avoids interfering with those activities, with property rights, and with contractual freedom, the economy works well. The market order is resilient enough to overcome a good deal of government harassment, but any level of interference imposes costs and the poorest people suffer most. The government really has only two basic choices: leave the people alone or really mess things up. Goodness knows that President Clinton has favored policies-taxes and regulations-that would have created major hardship had the economy been less resilient. Perhaps he deserves credit for not coming up with more inane interventionist policies than he has.
While economic indicators have been favorable, good times are not guaranteed. Some government policy could bring things crashing down at any time. We should be thankful that Clinton’s problems have stayed his hand from intervening even more in our productive activities. Presidents cannot “grow the economy” or create prosperity. Free people do that. The most government can do is stay out of the way. If the American people had the economic education they lack, they would see President Clinton in a far different light.