Stossel: The Economy Needs No Conductor

We spend too much time waiting for orders -- and money -- from Washington.

The collapse of the housing bubble gave politicians a license to do
what they wanted to do all along: spend. The usual checks on
extravagance, weak as they are, were washed away. Budgets? We'll worry
about that later. Inflation? We'll worry about that later.

As I point out in my brand new book, "No, We Can't: Why Government
Fails -- and Individuals Succeed," a true free market doesn't require
much. It's not like an orchestra in need of a conductor. What it needs
is property rights, so no one can take your stuff. Then people trade
property to their mutual advantage. Resources move around without the
need for a central, coercive government telling people which resources
should go where -- or telling them that they must get permission to do
what they think is advantageous.

Given time, an economy, unless crippled by further government
intervention, will regenerate itself. But during the recession,
Keynesians in the administration said government had to "jump-start" the
economy because businesses weren't hiring. An economy, however, is not a
machine that needs jump-starting. It is people who have objectives they
want to achieve.

If the economy continues to recover, President Obama will claim he
caused that. It wouldn't be the first time a "leader" ran in front of a
crowd and claimed to have led the way. But politicians don't deserve
credit for what free people do.

Despite politicians' talk of "giving" money to this or that (remember
those tax rebate checks with President George W. Bush's name emblazoned
on them?), government has no money of its own. It has to take it from
the private sector. Grabbing those scarce resources stifles the real
economy.

One of the most important questions in politics should be: "Would the private sector have done better things with that money?"

A healthy economy does not just create jobs of any kind, it creates productive
jobs. The pharaohs of ancient Egypt created plenty of jobs building
pyramids, but who knows how much better the lives of ancient Egyptians
(especially the slaves) might have been had they been free to engage in
other work? They would all have had better housing, more food or
snazzier headdresses. Even as smart a person as economist John Maynard
Keynes seemed to forget about that when he wrote in his "General Theory"
back in 1936, "Pyramid-building, earthquakes, even wars may serve to
increase wealth."

By that logic, government could create full employment tomorrow by
outlawing machines. Think of all the work there'd be to do then!

DANG, he's good!