Obamanomics undermines prosperity by “hacking” the virtual “information system” at the center of capitalism’s wealth-creating genius.
President Barack Obama, center, with members of his economic
team, speaks on the economy from the Rose Garden of the White House,
Sept. 15, 2010. http://whitehouse.gov
Consider the following:
Prosperity is fostered by efficient allocation of scarce resources.
Efficient allocation in a complex economy requires a complex information system, either distributed or centralized, virtual or real.
A free market allocates efficiently by functioning as a vast, distributed, virtual information system that corrects and prevents misallocations of resources.
Although many people think evil of Wall Street and its legions of analysts, the dreadful alternative is a Soviet-style, central planning system. That difference is huge.
Wall Street analysts make their living by “getting it right.” Central planners don’t– and most importantly, don’t particularly care, being on the public payroll and therefore suffering little or no consequences for making mistakes. So not surprisingly Wall Street analysts function positively to inform the marketplace, while central planners function negatively to disrupt it.
Obamanomics is a move toward more and more central planning. So anytime you hear the present regime say “targeted,” think Soviet-stye central planning. Anytime you hear “termporary targeted,” seek shelter immediately.
That’s because “targets,” temporary or otherwise, are code words for a “first strike” on the market in favor of political rather than economic interests. And the indulgence of those interests naturally plays havoc with the information processing going on in the marketplace.
So it’s no surprise businesses react to an Obamanomics-dominated Congress by shelving future plans in the face of market projections too “hacked” by government actions to be trusted, while also scaling back on existing plans as expected profits vanish via the non-economic impositions of lawmakers and bureaucrats.
On left, photo of MacDonald’s employees (copyrighted).
On right, diagram of Democratic health care plan from
Rep John Boehner’s website. The potential loss of
health care by MacDonald’s employees as a result of
ObamaCare is a classic example of government’s inability
to make timely and appropriate economic decisions
vis-a-vis the free market.
The point here is that arbitrary and unexpected regulations on businesses have much the same negative impact on the effectiveness of the free-market’s information system as a natural disaster, or in terms more appropriately sinister, as information warfare where “hackers” break into information systems and scramble the data.
Government intervention into the marketplace via Fannie Mae
and Freddie Mac reduced national wealth by trillions of dollars.
Some of the loss was the bursting of an artificial “bubble,” but
much of it was due to the uncertainty government policy
introduced into mortgage documents– something akin to
what “hackers” might do.
When Congress “gets a lot done,” the market tends to suffer. Historically, the American economy has prospered most when political gridlock has prevented the government from “hacking” the economy’s decision support system in the pursuit of partisan political goals.
In that light, Americans ought to be absolutely furious with a regime that has used its one-party rule to borrow trillions of dollars to essentially accomplish what an army of cybersecurity experts would hope to prevent.