Why I Oppose Central Planning

Robert Reich has put on quite a show lately demonstrating the pervasiveness of economic ignorance in political and general discourse.  He does an excellent job showing why economic education is needed.  Unfortunately, his plans, and their flaws, are not unique to him.

The biggest problem with his “10 Steps” plan is also found within many political plans, from Stalin’s Five-Year Plans to the New Deal to the Great Society, etc etc.  They all contain contradicting elements.  Earlier, I discussed how Reich goes from demanding raising wages to demanding falling wages (within a day of one another).  In the past, I’ve talked about his confused case both against and for automation.  But this can be seen in other economic policies: green energy (the federal government subsidizing green energy, yet imposing tariffs on solar panels to make them more expensive), War on Poverty (imposing minimum wage, which harms employment, and the EITC, which supports employment), consumer debt (keeping interest rates low to discourage saving in safe assets but providing non-taxed retirement plans), the list goes on.

When a government plans, especially in a republic or democracy, the policies change with different administrations.  Representatives hock their own special interests (Iowa senators want corn subsidies while California senators want almond subsidies), and oftentimes they contradict.  As favors are rarely repealed and vote trading is a real thing, this often leads to incoherent economic policies that do nothing but cost billions of billions of dollars.

Get politics out of economics and watch the world thrive.

2 thoughts on “Why I Oppose Central Planning

  1. People complain about money buying elections or politicians. Yet, they ignore the fact that, if the federal government, for example, did not extend their activities beyond the enumerated powers, there would be nothing for the money to buy. It is because the citizenry has demanded that politicians “do something”, there is now that portion of something (called the law) to expand, exclude, change or preferentially execute.

    The internet has a speech by Davy Crockett while he was in Congress where he refused to vote for an appropriation to help a widow of a fallen soldier from the War of 1812. He could not pinpoint where he was empowered to offer such a generous solution but suggested the individual congressmen give their own money to the cause.

    . http://www.tysknews.com/Depts/Constitution_Issues/davy_crockett_and_charity.htm

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