Wednesday, November 19, 2008

the problem with government intervention

a friend recently asked me about my rationale for distrusting government intervention. is it really true that government intervention tends to make things worse? what's the evidence for that, she asked?

a current example would be the federal government's response to the current economic crisis. under 'conservative' george w. bush, it has been shoveling money at businesses "too big to fail" and buying an interest in some of them (why isn't anyone calling that socialism?). it has passed a $700 billion dollar bailout with no clear plan for what to do with the money, and with the prospect of rapidly expanding its powers. all of this, we were told, was to avert disaster in the economy, and anxious congressional representatives and senators lined up to pass the bill, shortly before the election; no one wanted to be perceived as "not doing enough."

less than two weeks after the election, treasury secretary henry paulson is on his third plan for what to do with the $700 billion -- with the possibility of more to come. even mainstream pundits are finally turning on the bailout; ed koch, floyd norris, and the wall street journal are concerned. their number is greatly multiplied as people look at the proposed bailout of the auto industry. now congress is grilling paulson and fed chariman ben bernanke. everyone suddenly wants answers (you can read about it here).

not surprisingly, the government's actions have not kept the economy from continuing to sour. they'll say that it's because there hasn't been enough time, or because it hasn't been enough intervention. but the truth is that they didn't understand what caused the problem and didn't know what to do when things began to unravel. they never knew whether or not the bailout would help, and they still don't. but it won't stop them from thinking of new ways to spend. they'll pass new bills -- economic stimulus package, anyone? -- and intervene in more and more sectors of the economy. they aren't 'saving the free market;' this is crony capitalism at its worst.

and one might even tolerate that if it helped the economy to get on the right track. the problem is that their intervention makes things worse. it actually slows the recovery because it creates uncertainty in the market to keep changing rules in the middle of the game. people and businesses can't make rational decisions when they're wondering if the government might come along with a big 'rescue.' with its sometimes well-intentioned actions (or in some cases, the implied promise of acting), the government creates a moral hazard, causing participants to act in ways that otherwise wouldn't make sense, in the hope of receiving 'help.' john stossel does a fine job of explaining some of the difficulties here.

moreover, the government's costly interference sends budget deficits and the national debt soaring -- effectively charging huge purchases to the nation's credit card, and leaving the bill for future generations. what would you think of parents who refuse to live within their means and keep running up huge debt, figuring that their kids and grandkids can always pay it off later? that's worse than unhelpful; it's immoral.

why is all of this so predictable? because government operates without many of the constraints of a private enterprise. it does not have to compete for customers. it does not have to make a profit to survive. it never has to be careful with money lest it risk going out of existence, as it can always tax or print more money. these factors allow it to continue in inefficiency and ineffectiveness long after a business would have had to change its ways or go belly up. there is little incentive to remove ineffective or even corrupt workers and leaders, or to change policies that aren't working.

so now people aren't happy with the bailout. but what will they do about it if the government throws tens of billions at the auto industry -- or plunks down more cash for aig a.k.a. 'the money pit?' at best, they remove this group of representatives, only to have the next group continue pouring their money down the same failed hole -- as will happen when the obama's liberal democratic administration replaces bush's conservative republican one.

i should be clear in stating that i don't think free markets solve every problem. but the current economic crisis is a great example of how sometimes, the government's doing something is worse than doing 'nothing.'

Saturday, November 15, 2008

change has come

i've read a lot of post-election articles -- on what an obama presidency will mean, for good and for ill, on how the republican party lost the election -- and lost its way, and on and on it goes. one thing's for sure: there will never be an end to words. these folk write and write, and after a while, the words blend together and are quickly forgotten. i think if some of these folk were honest, they'd admit that they really didn't have much to say. they just had a deadline to meet and column inches to fill.

but i highly recommend the article by leonard pitts jr. of the miami herald, entitled 'we' are finally a part of 'we the people.' his reflections are worthy of long consideration; and he has a sense of history, significance, and proportion that i greatly appreciated. here's an excerpt:

i always thought i understood what michelle obama was trying to say.... namely, that with her husband, this brown-skinned guy with the funny name, making a credible run for the highest office in the land, she could believe, for the first time, that ''we the people'' included her.

it is, for african americans, an intoxicating thought almost too wonderful for thinking. yet, there it is. and here we are, waking up this morning to find barack obama president-elect of these united states.

in a sense, it is unfair -- to him, to us -- to make tuesday's election about race.... but in the end, after all that, there still is race.

and it would be a sin against our history... not to be still and acknowledge that something has happened here and it is sacred and profound.

for most of the years of the american experiment, ''we the people'' did not include african americans. we were not included in ''we.'' we were not even included in "people.''

what made it galling was all the flowery words to the contrary, all the perfumed lies about equality and opportunity. this was, people kept saying, a nation where any boy might grow up and become president. which was only true, we knew, as long as it was indeed a boy and as long as the boy was white...

there was something bittersweet in watching michelle obama lectured on american pride this year, in seeing african americans asked to prove their americanness when our ancestors were in this country before this country was. there was something in it that was hard to take, knowing that we have loved america when america did not love us, defended america when it would not defend us, believed in american ideals that were larger than skies, yet never large enough to include us.

we did this. for years unto centuries, we did this. because our love for this country is deep and profound. and complicated and contradictory. and cynical and hard.

now it has delivered us to this singular moment. barack obama is president-elect of the united states.

and we the people should be proud.
those who opposed an obama presidency complained that there seemed to be more style than substance to his campaign, more rhetoric than reality to his promises. that assertion -- and obama's ability to govern -- will now be tested. will he lead in a way that helps americans to overcome the rancor of the past and find some common ground? will he be, as a recent president famously promised but failed to be, a 'uniter and not a divider?'

but even if an obama presidency isn't all that its proponents hope it will be, there is, as pitts points out, something that has happened that is both sacred and profound, something that should not casually or cynically be brushed aside. it may or may not prove to be the time when the oceans began to recede and the earth began to heal itself -- but it is undoubtedly a step forward on a significant front. and that's worth celebrating.

Wednesday, November 05, 2008

making history

barack obama, 44th president of the united states of america.

who would have thought that only forty years after the assassination of martin luther king jr and the formal end of jim crow that a bi-racial black man would be elected president? what was especially impressive to me was the fact that the opposition argued against him because of his policies -- not because of his race.

having already written about my own reservations about an obama presidency, let me just say that there is still a part of me that is thrilled at his election. there's still work to be done in the area of race relations in america, but what an amazing distance we've covered in my lifetime.

i'll be praying regularly for president obama and his government. i hope you will too, no matter how you voted.

Monday, November 03, 2008

the newest member of the family

this is baby a, the newest member of our family. she arrived a couple of weeks early, in late september. as you can see, she's beautiful. k and m make some good-looking kids!

i had the chance to see her and the other cousins on a recent visit to california, when i was meeting with my covenant group for a few days. my mom put together an incredible dinner, featuring prime rib and asparagus -- delicious!
we were also celebrating my sister k's birthday; that's the cake in the lower left-hand corner of the photo. i was going to write up some kind of joke about her miraculously getting older than me somewhere along the way, but the photo just ruins that. the former homecoming queen is still looking great.

i spent the night with my folks, which was a treat, and even had the chance to help my dad straighten out a few things on his computer. i'm using windows full-time these days (hazard of living so close to microsoft!), but in my heart, i'm a mac guy and can still do a thing or two with os x.
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