Bush's Hubris vs. Obama's Central Control

Democrats accused the Bush administration of hubris in attempting to “impose democracy” on middle-eastern nations locked into dictatorship. Perhaps they were right; maybe it was hubris to imagine that people of other nations would want to follow our example; perhaps they were not ready for a free society.

But what is one to make of what the Democrats are trying to do to our economy? Their top economists are trying to manage markets which involve the independent decisions and actions of millions of individuals. Years of examples have demonstrated that such management is a fool’s errand. Did we learn nothing from the disaster that was Communism? Didn’t we have enough of our own experience of inflation despite price and wage controls in the 1970s to make the point that government cannot “manage” the economy? Wasn’t the result of the government’s misguided encouragement of subprime lending in the last decade a good enough example of how complicated are the interactions of an economy and how even the best intentions can lead to disaster?

In the eleventh century, Canute, king of the Danes, demonstrated the limits of his power by commanding the tide to not come in. Naturally, the tide came in anyway. Today, our government commands banks to lend even when borrowers are unworthy or uninterested in borrowing; it commands car manufacturers to make and sell cars that people don’t want to buy; it spends wildly to “stimulate” economic activity. Loans do not magically appear, cars do not fly out of dealerships, and the economy goes along at its own pace, oblivious to the government’s demand to roll back the tide of recession.

Today’s economists and politicians should take a lesson from Canute. There are some things they want to make happen that are beyond their power to achieve.