A few thoughts prompted by “Stocks Swoon, Worry Rises” — the banner headline in the weekend Wall Street Journal:
• Even as stocks swoon and worries mount, our president continues to hold his head high — a little too high, in fact — every time he strides to the podium. This makes him the anti-Princess Di. He is always triumphantly chin up, just as she, poor thing, was always tremulously chin down. Given the lousy state of the economy, he might try to be a little self-effacing himself. He should stop acting as if he expects his every word to be greeted with rapturous applause.
• Why would anybody pay $2.6 million to have a “power lunch” with Warren (“Please, may I have a tax hike, Mr. President?”) Buffett? But someone who wishes to remain anonymous did just that on Friday night — bidding on eBay. The proceeds will go to a charity in San Francisco that feeds those who have “given up on themselves.” It seems appropriate. Perhaps Mr. Buffett could start a billionaires-for-diminished-self-reliance club.
• How can we measure Mr. Buffett’s net contribution to P, our nation’s prosperity? I would suggest the formula A minus B = P, where A is the money that he has earned for Berkshire Hathaway shareholders through his prowess in picking stocks, and B is the negative impact he has had in lending superficial credence and support for wrong-headed policies (favoring higher taxes, increased government intervention into the economy, and disregard for constitutional limits) that are responsible for the weakness of the recovery, if it can even be called a recovery. Under my formula, it is probable that Buffett, a frequent visitor to the Obama White House and winner of the Presidential Medal of Freedom, is already in negative territory in the calculation of P. We have a massively under-performing economy, thanks at least in part to business leaders who have been happy to truck with bad policies either because they have benefited directly from them (as Buffett has in being heavily invested in Goldman Sachs and other financial firms that were bailed out by TARP money), or because it has endeared them to the mainstream media (Buffett qualifies here too).
• One mistake that Mr. Obama does not intend to repeat is the one that he made at the outset of his presidency in selling the $787 billion stimulus bill on the basis that it would keep unemployment from rising above 8%. Of course, that is not what happened. Unemployment shot upward — passing 8% and then 9%. Now the president refuses to be specific on anything he would do to slash spending and deficits. He makes no attempt to explain how the government should go about matching spending and revenues. Let the Republicans hang themselves in trying to explain to the American people what should be done to keep Medicare and other entitlement programs from bankrupting the government.
• But that leaves a small problem for the president. He still has to explain how he and his administration will try to move things forward over the next 12 to 18 months, as unemployment is rising once again and most people (according to polls) have the sinking feeling in the pit of their stomach that things are getting worse, not better.
• What we get from the White House on this score is mostly a bunch of bromides about the need for more “partnering” between business and government. Sounding very much like the community organizer he used to be, the president breathlessly proclaims: “If we could match up schools and businesses, we could create pipelines right from the classroom to the office or factory floor. This would help workers find better jobs, and it would help companies find the highly educated and highly trained people they need to prosper and remain competitive.”
Are we really going to send people by “pipeline” — and, I suppose, pneumatic tube — straight from the classroom to the factory floor? What a laugh! But the more serious point here is that if there is one thing that we don’t need any more of, it is “partnering” between government and business. We already have far too much of that — with much more of it on the way if the Obama administration gets its way with cap and trade, dramatically increased public spending on high-speed rail, solar energy and other forms of alternative energy, and other plans for nanny-state masterminding the nation’s affairs from Washington, D.C.
What Obama & Co. are really talking about is creating a brain-dead economy — one that no longer effectively collects or sends signals to and from any of the many regions in the body. In a free market system, no one “orders” growth to occur. It is the spontaneous, almost accidental result of voluntary exchange. It comes about as a result of countless individuals who seek to meet their own needs by meeting the needs of others.
This is why centrally planned economies always fail. Planning subverts the dynamic interaction that comes from unrestricted competition and free choice. The planners think they know everything. In fact, they know nothing.