American Prosperity–Because of or In Spite of Government?

There is a lot of talk in politics about cause and effect.  Primarily, parties try to claim that something they championed caused the prospects of the country to improve, or that something they opposed caused the country to deteriorate or decline.  While this may be in some sense true as far as quality of life and moral standards go, I don’t think it holds very true economically.

Oh, sure, I would be the first one to tell you that FDR was responsible for keeping us in a depression for 14 years.  And I would wager that Obama has a plan to do the same and is having success so far.  But, the economic engine of America is so big, it eventually rights all wrongs. overcomes all obstacles and booms.

Now, average Joe may be greatly influenced, at least in the short term, by the blunders of bureaucracy.  And there is no doubt that he is much more oppressed now than he was in 1950.  However, he is much less likely to be standing in a soup line than was the average Joe of 1937, and much less likely to be trying to take a hill on Iwo Jima than his counterpart of 1944.  Certainly we can look at ourselves on the back side of the post-war boom and say that things are in decline.  And we can point to whatever oppressive legislation is in place and declare it the culprit.  But, every time things got tough for business in the past, business got going.

Recently, inventive people have discovered how to increase the availability of oil reserves a hundred fold.  Other inventive people are discovering work-arounds to trade laws that will allow massive exports of petroleum products and unprecedented profits for Americans.  So much has the landscape already changed that even I have been proven mistaken in my belief that Obama’s policies would raise gas prices to $6 per gallon here.  Faster than even I imagined, new technology is pushing prices rapidly in the other direction.

Here is a prime example of that to which I speak.   Obama’s draconian plans to kill oil production has spurred incredible innovative juices to thwart his efforts.  By the end of his presidency, we are likely to see gas prices returning to pre-Obama levels and the economy, by knee-jerk, taking off again.  In other words, business will have once more saved a president’s legacy, much as in FDR’s time.  And yet, much as with FDR, Obama will probably get the credit. Even though all the evidence indicates that this boom will come in spite of his policies, succeeding generations will gush that it happened because of his policies.  This, of course, will further the dangerous course of the government choke hold whenever we see the next ebb in the economic cycle.

In reality, business continues to innovate, expand, create more jobs and more wealth all the time.  Regulatory snafus and failed government programs often choke the flow of this money to average Joe.  So, average Joe perceives a crisis, and this is reinforced to him on the national news.  And average Joe, along with all of his below average relatives, is coaxed into a human outcry that fuels rage, debate, national drama, and TV ratings.  All the while, out of sight of average Joe, things keep humming right along.  Technologies come and go, each one replace by something better.  There are always those who invest too heavily in the past who are smashed in the ripples.  But, by and large, everyone survives and lives to see another, more prosperous day.

The only thing that really poses a serious threat to the economy is the propensity for governments (or militant groups such as ISIS) to wage war.  In this way, government can affect prosperity, but only negatively.  The toll of human suffering from loss of life, property, and limb, is almost incalculable.  America has managed to keep wars off her own soil for 150 years (give or take a Pearl Harbor).  And so, she continued to prosper.  Yet, her dalliance in Asian and middle east conflicts has been a huge anchor on the American economy, even as war is erroneously touted as what brings us out of the slump.  It is probably not coincidence that America has now been at war for over a decade and that the economy has been in malaise for about the same length of time.

In my business, the operating slogan is “do no harm.”  To me, the best presidents are the ones who get out of the way and let the business of America prosper.  Reagan was not always the best president, but he allowed business to prosper and is well remembered for it.  Clinton’s policies were obstructive.  Yet he is well remembered because the country was prospering during his reign.   Neither of these men created prosperity so much as presided over it.  Certainly Carter was by all accounts inept as president.  Yet, he did not create the economic slump that poisoned his presidency.  His handling of the situations created a perception in the public eye that things were worse that they were, and, to some degree, he made things worse for the average Joe.

America is a gifted land.  But, the tradition of hard work, problem solving and innovation are what made and keep this country foremost in the world.   The government cannot stop the engine, short of waging war on America itself.  But it can influence how many of us average Joes are allowed to grab our share.  The less it tries to steal from business to give to the poor, the more business will assimilate and eliminate the poor.

All Americans have this choice.  On the one hand, they can take what the government steals from enterprise and be stuck with poverty.  Or they may opt to eschew the handout, join enterprise, and proper with it.  Choosing to leave the underclass will eliminate the need for the government to feed the underclass, and the underclass will die of attrition.

In the book Flat Land, a man became acquainted with a world that only existed in two dimensions.  No one in this world could conceive of being able to move in the third dimension and couldn’t even conceive of the existence of it.  Then, one day, a sphere passed through Flat land and amazed everyone.  Eventually, a flat lander was ripped out of flat land into the three-dimensional world, saw and understood the sphere, and didn’t want to go back to Flat land.

If government has done one thing for the under class, it has been to convince them they live in Flat land and that they could never possibly ever get out.   It’s not going to be easy to convince them otherwise, but they can get out.  All of the generations before them got out.  If they get out, it will not be because of government.  But, in spite of government, hope for properity springs eternal.

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Filed under Law and Politics, Open Mind

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