Tuesday, April 20, 2010

Government and its relationship to immutable economic laws

'...the political establishment continues to argue that the market needs to be prevented from delivering rough justice to sinners. President Obama, who one year ago gave us a worst-case scenario in which an unstimulated economy might hit 8 percent unemployment by this year, now presides over 10 percent unemployment but tries to bamboozle us with counterfactuals like this doozy from the 2010 State of the Union address: “If we had allowed the meltdown of the financial system, unemployment might be double what it is today.”'


King Canute knew that the tide would come in, even if he commanded it not to. Our very much sub-King Canute rulers don't know this simple truth. They think they can change the laws of economics by fiat.

'...The current recession has become the economic version of The Fantasticks, a show that keeps running long after the audience wants to move on. It’s becoming increasingly clear that by not letting anything collapse, by not allowing sweet, beautiful failure to happen, the government is helping to drag out the pain. That may not be indicative of anything new, but it’s enough to make you want to bulldoze a house or two.'

This seems both fatalistic, and a bad use of anger. The crucial thing about governing nations is that innumerable lessons have been learned during the last three or four thousand years- and codified into constitutions and laws. Successful constitutions, like that of the United States, work with human nature to ensure both effective and non-tyrannical government. It is time to codify general economic rules into our constitutions.

Here are a few off the top of my head:

1) The government role in the economy is that of umpire, never participant.
2) Government shall never provide goods and services, except those which no other institution can provide.
3) No asset shall ever be deemed to be the property of the Government by default.
4) Taxes will be renamed 'Appropriated Citizens Money', just so we're clear.
5) No government employee should ever recieve higher remuneration than an equivalent worker in the private sector.
6) All government hirings go before citizen juries for scrutiny. Once the government debt ceiling goes over a specified level, no further hiring can take place.
7) Every year, the government will publish its accounts, to the standards of public companies, in a format understandable to at least 75% of the population. This must include all liabilities, including pensions and benefits provided to anyone in the public sector; plus future liabilities which are predictable.
7) Education, Training welfare and Health care are services, and can be provided by institutions other than government. Government shall have no role in the provision of these services, other than the normal umpiring of their provision.

I'm sure I can improve on these, and indeed increase them. But they'll do for now.

No comments: