Here’s what George Leef had to say about Sheldon Richman’s column linked below:
Sheldon Richman’s column […] explains why Obama’s approach to the economy is sure to fail (or even make things worse) — he just doesn’t understand the difference between market decisions and political decisions. He’s blind to the difference in incentives. Market competition leads to productive uses of resources and mistakes are quickly corrected, whereas political decision-making is based on coercion and bad decisions are often never corrected.
Or perhaps Obama does get this but doesn’t care. He is, after all, an authoritarian and authoritarians tend to be indifferent to the harm they inflict in pursuit of their grand visions.
It really is Econ 101. Now…if we could only reach more people with these basic facts. Here’s the opening of Richman’s excellent article:
President Obama is again turning his attention to the elusive economic recovery. His “pivot” will be for naught, however, as long as he continues to ignore two important points: first, government is a major squanderer of scarce resources, and second, its regulations are impediments to saving and investment.
We live in a world of scarcity. At any given time our ends outnumber the means to achieve them. Hence we economize so that we can achieve as many of our ends as possible. Resources, labor, and time devoted to one purpose can’t also be used for other purposes, and the alternative forgone is the true cost of any action. We individually choose among competing ends after assessing the trade-offs, because we don’t want inadvertently to give up something we prefer in exchange for something we don’t value as much.
The marketplace, when it’s free of government privilege and regulation, lets us accomplish this to a remarkable degree. In doing so, it raises our living standards and creates an orderly environment, thanks to the price system, which coordinates and facilitates our plans.