Another great article by John Stossel: “Uncertainty Paralysis”
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There are few men who just always seem to make a great deal of sense when they speak and John Stossel is one of my favorite. He cuts right thru all the chaff and gets right to the meat simply and clearly. The following article is not new news but is a great sumation of where we are now and why and how we got here as well as a simple solution. The solution really is simple and it amazes me that our government officials can’t seem to understand it. As for our President….well Educated Idiot may be applied if you want to give hijm credit for being a decent human being. I don’t, so I will just label him as evil. BB
By John Stossel
Wednesday, June 06, 2012
President Obama would do us all a big favor if he’d ask himself this: “Would I start or expand a business without knowing what regulations or taxes government will impose next year?”
If he’d just stop and ask that, he’d have a sense of what’s wrong with the economy. He’d understand why a country that must create 120,000 new jobs each month just to absorb newcomers created only 69,000 last month.
Past recoveries were quicker. Something is different. What could it be?
Let’s remember that the economy — which is to say, us — is already burdened by byzantine bureaucratic impositions. Every week, the feds add another thousand pages of rules and proposals for rules. Local governments add their own. My mayor, in New York City, even proposes micromanaging the size of the drinks restaurants may sell.
On top of the existing mountain of red tape, the Obama administration has piled on more, with more to come. Obamacare was less a specific prescription than a license for the Department of Health and Human Services to write new rules, lots of which are yet to be written. No one knows how the bureaucrats will micromanage health insurance.
Then there’s Dodd-Frank, the 2,300-page revamp of finance industry regulation. Again, the bill left the rule-writing to regulatory agencies. Who knows what they will come up with? (All these little clerks at their desks trying to justify their jobs! BB)
Every year, Congress makes thousands of changes to tax laws. And no one can guess what will happen in 2013 if the 2001 and 2003 rate cuts expire.
There is an irresistible temptation for politicians to “do something” whenever real or imagined problems appear. The number of on-the-fly programs in recent years (from attacks on unpaid internships to Cash for Clunkers) has been astounding. This uncertainty kills job creation. If you cannot tell what will happen next week, next month, next year, why make a significant commitment? The next law or executive order might make a mockery of your plans.
America faces a humongous debt, and its trajectory is upward. If nothing changes, the whole budget would be consumed by interest payments. No politician wants that — if only because there’ll be no money to buy votes.
How will the problem be dealt with? Higher taxes? Massive inflation? Some combination? Where does that leave someone today who might, in a more stable policy environment, be eager to launch some big, long-term investment project?
In the dark, that’s where.
Economist John B. Taylor of the Hoover Institution summed it up aptly: “Unpredictable economic policy — massive fiscal ‘stimulus’ and ballooning debt, the Federal Reserve’s quantitative easing with multiyear near-zero interest rates, and regulatory uncertainty due to Obamacare and the Dodd-Frank financial reforms — is the main cause of persistent high unemployment and our feeble recovery.”
Historian Robert Higgs of the Independent Institute calls it “regime uncertainty.”
We should have learned the lesson during the Great Depression. Today’s problems are nowhere close to the 1930s, but there is a similarity in Franklin Roosevelt’s policy fog. Higgs writes:
“The insufficiency of private investment from 1935 through 1940 reflected a pervasive uncertainty among investors about the security of their property rights in their capital and its prospective returns. … The willingness of businesspeople to invest requires a sufficiently healthy state of ‘business confidence,’ and the Second New Deal ravaged the requisite confidence… .”
The solution? Taylor finds it in the writing of Nobel laureate F.A. Hayek: the rule of law. “Stripped of all technicalities,” Hayek wrote in “The Road to Serfdom,” “this means that government in all its actions is bound by rules fixed and announced beforehand — rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.”
If we are ever to get out of this hole the politicians have dug, we must disabuse them of the conceit that they improve our lives by spending more, guaranteeing investments or “jump-starting” industries.
Only when politicians butt out, leaving us with simple, predictable rules, can the economy grow for us all.
John Stossel is host of “Stossel” on the Fox Business Network. He’s the author of “Give Me a Break” and of “Myth, Lies, and Downright Stupidity.” To find out more about John Stossel, visit his site at johnstossel.com. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
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(I often learn for the emails. BB)
*** Mr. Hinkle’s article that you carried was most interesting. I particularly appreciated its logical, reasonable tone. In an era where any issue becomes a matter of ideological bias, he made a very reasonable case.
This doesn’t discount the development of other sources of energy. If there was a perfect market system without subsidies for oil companies and renewable energies, then perhaps price would determine investment choices. Oil of course has other consequences such as triggering wars and it is a contributor to greenhouse gases. Thank you, Jim
Bidwell comment: Jim, if oil companies and renewable energy firms did not get subsidies, then yes, the price of the various energy sources would determine investment choices. Price would dictate the energy sources we develop and use, and energy would be like any other market good.
You can make the same case for healthcare. If the government didn’t subsidize healthcare, all of our healthcare costs would come down because healthcare would be like any other market good. All in all, government funding and involvement manipulates markets, and American consumers end up paying more (and sometimes for less effective products). (YES!! This goes for education and any thing else. The government gets into it and the prices go sky high! BB)
*** Why can’t the government pay for infrastructure and so on by selling natural resources (like oil)? Sincerely, Walt
Bidwell comment: Walt, you are a smart man. If you are like John Heffern and me, you are very excited about the possibility of fracking and shale oil. With this technology, high pressure water is used to frack rocks, and the rocks release oil and natural gas. With some research and development, natural gas will be able to power cars and trucks while we become one of the leading exporters of oil. This might all happen within the next few years…
That is, if the government agencies like the Environmental Protection Agency and others do not stand in the way of this technology. If the government doesn’t impede innovation and growth, our country can become preeminent again, will be able to afford state of the art infrastructure and plan accordingly for the future.