WHEN YOU CLEAR away all of the obfuscation from presidential campaigns, the entire process comes down to each candidates accusing the others of not being qualified for the office. This was certainly true in the 2000 presidential campaign. And every candidate who said or implied that about his opponents was absolutely right.
No one is qualified to be president. No one.
This is not a statement born of cynicism. Its cold fact. How could anyone be qualified to direct a $2-trillion-a-year behemoth also known as the federal government designed to meddle in the lives of every person in the United States and quite a few overseas as well?
The president of the United States is expected to steer the economy. But this grossly misconceives what an economy is. Its not a ship. The economy is a figure of speech. In reality its just a bunch of people engaged in production and trade. Steering the economy translates into telling people what to do. Aside from the moral issue involved (telling them what to do violates their freedom), no one knows enough to intelligently direct 265 million peoples activities. Steering is a euphemism for some degree of central planning, which is doomed to failure. (For details see the work of Ludwig von Mises and F.A. Hayek.)
Perhaps some readers will think the term central planning is inappropriate for the United States, land of free enterprise. Well, what was the case against Microsoft if not an attempt to centrally plan the computer software industry? The government decreed that Web browsers must not be integrated into operating systems. It was actually worse: the decree applied to only one company. Then-antitrust chief Joel Klein said so. Or how about his decision that MCI WorldCom might not merge with Sprint because a combined company would not conform to his vision of the (quickly vanishing) long-distance telephone industry? The president hires the attorney general, who hires the antitrust chief. Thus to be president is to have some of the powers of a central planner.
Those are just two examples of how the president and his men aspire to plan the economy our lives. The alphabet agencies staffed by the president EPA, OSHA, FDA, FTC, ad nauseum exist to enable social engineers to carry out their visions of our futures. (Thanks, but I have plans of my own, just as everyone else does.) The federal budget these days is little more than a transfer machine set up to induce particular behaviors and to buy off constituencies.
Taxes and spending
Political leaders have a stake in convincing us that they can and do steer the economy. President Clinton feverishly takes credit for the last several years of economic growth. Hed have us believe that his big 1993 tax increase is responsible for all the good things we see in the private sector. (He says he wonders where the doubters think all the jobs came from.) Clinton assumed office several months after a mild recession had ended. The budget was deeply in deficit not because tax cuts reduced revenues in the 1980s (that myth dies hard), but because the government spent well over a buck for every buck taxpayers were forced to pony up.
How exactly was the Clinton tax increase going to turn that around? Their theory is that by showing fiscal restraint and attacking the deficit, the administration reassured the financial community, bringing down interest rates and stimulating economic growth. Nice fantasy. Clinton showed no interest in killing the deficit before the Democrats lost control of the Congress in 1995 (thats when the Dow took off), and then he dragged his feet. He never advocated fiscal restraint: read the State of the Union addresses!
Nonmilitary spending has grown during the eight years. Spending caps are routinely violated under the ruse of emergency. As the Cato Institute points out, the Republicans are accomplices: the 106th Congress is the biggest-spending Congress since the Jimmy Carter-Tip ONeill years.
So what accounts for the prosperity? It cant be that the Clinton program brought down interest rates. As economist Russell Roberts points out, interest rates are higher today than when Clinton took office. Theres simply no connection between budget deficits or surpluses and interest rates for a simple reason: the governments biggest deficits were but a thin sliver of the $25 trillion capital market. The government can do many bad things, but it hasnt managed to borrow enough money to affect that market. The U.S. GDP exceeds $9 trillion.
We should also keep in mind that Clinton failed to get three of the four pillars of his program through Congress. His plan to take over the medical sector (14 percent of the economy) never got to a vote. His spending stimulus package went down in flames, as did his plan for an energy (BTU) tax. (By the way, do you remember when Clinton confessed to a business audience that he had raised taxes too much?).
Then why the prosperity? Technological innovations made possible by people like Bill Gates, and corporate innovations made possible by people like Michael Milken both of whom are demonized by the Clinton administration. Their accomplishments unleashed the productive efforts of millions of people, which in turn flooded the government coffers with surplus revenues. The tax take is at a record peacetime high. If Clinton and Congress can take credit for anything, its for cutting the capital gains tax in 1997 and for freeing up some international trade, though substantial barriers to free trade remain.
Far from deserving credit for the prosperity, the Clinton bureaucrats still maintain impediments to productive activity and seek to add more. The president cant bear the idea of a tax cut that doesnt compel certain people to act in prescribed ways, and hes always pushing myriad new spending programs.
There was a time when no one would dream that a president was qualified to run the economy. He wasnt expected to. Instead, he was called on to preside over a government possessing the few powers spelled out in Article I, Section 8, of the U.S. Constitution. Mere mortals could handle that job. But maybe it wasnt glamorous enough for the people who aspired to be president of the United States for many of them pushed the limits as far as they could. I have in mind especially Lincoln, Roosevelt I, Wilson, Roosevelt II, and all their political heirs and assigns.
This presents us with an awesome challenge. The federal government was once limited, even if not perfectly. But it was able to break through the limits and gobble up chunks of our liberty. Putting it back in the cage is challenge enough. But the tougher task will be finding a way to keep it there. To borrow a conundrum from philosophy: Can the polity tie a knot so complex that it cannot untie it? I dont know that it can. But we can worry about that after we get the beast caged once again.
Presidents can do a million things to screw up an economy, but they can do only one thing if they want the maximum general prosperity and freedom: leave it alone! Thats what theyre qualified for.