Americans have had it so good, for so long, that they seem to have forgotten what government’s heavy hand does to living standards and economic growth. But the same technological innovation that is causing all this dislocation and anxiety has also created an information network that is as near to real-time as the world has ever experienced.
For example, President Bush put steel tariffs in place in March 2002. Less than two years later, in December 2003, he rescinded them. This is something most politicians don’t do. But because the tariffs caused such a sharp rise in the price of steel, small and mid-size businesses complained loudly. The unintended consequences became visible to most Americans very quickly.
Decades ago the feedback mechanism was slow. The unintended consequences of the New Deal took too long to show up in the economy. As a result, by the time the pain was publicized, the connection to misguided government policy could not be made. Today, in the midst of Internet Time, this is no longer a problem. So, despite protestations from staff at the White House, most people understand that food riots in foreign lands and higher prices at U.S. grocery stores are linked to ethanol subsidies in the U.S., which have sent shock waves through the global system.
This is the good news. Policy mistakes will be ferreted out very quickly. As a result, any politician who attempts to change things will be blamed for the unintended consequences right away.
Both Mr. McCain and Mr. Obama view the world from a legislative perspective. Like the populists before them, they seem to believe that government can fix problems in the economy. They seem to believe that what the world needs is a change in the way government attacks problems and fixes the anxiety of voters. This command-and-control approach, however, forces a misallocation of resources. And in Internet Time this will become visible in almost real-time, creating real political pain for the new president.
In contrast to what some people seem to believe, having the government take over the health-care system is not change. It’s just a culmination of previous moves by government. And the areas with the worst problems today are areas that have the most government interference education, health care and energy.
The best course of action is to allow a free-market economy to reallocate resources to the place of highest returns. In the midst of all the natural change, the last thing the U.S. economy needs is more government involvement, whether it’s called change or not.
Quotations
Kissinger: Establishing Priorities, Tolerating Our SOBs
“Kissinger … was above all a revolutionary.” … [T]his may come as something of a surprise. Kissinger a revolutionary? The man who told the Argentine junta’s Foreign Minister, Cesar Guzzetti: “We wish [your] government well”? The man who promised his South African counterpart to “curb any missionary zeal of my officers in the State Department to harass you”? The man who told the Chilean dictator Augusto Pinochet: “We are sympathetic with what you are trying to do here”? Yet Suri has a case to make, even if he does not make it more than obliquely. An integral part of Kissinger’s grand strategy was always to establish priorities. In order to check Soviet ambitions in the Third World the full extent of which we have only recently come to appreciate some unpleasant regimes had to be tolerated, and indeed supported. Besides the various Latin American caudillos, the Saudi royal family, the Shah of Iran and the Pakistani military, these unpleasant regimes also included (though the Left seldom acknowledged it) the Maoist regime in Beijing, which was already guilty of many more violations of human rights than all the right-wing dictators put together when Kissinger flew there for the first time in July 1971.
Niall Ferguson, reviewing Henry Kissinger and the American Century
The book sounds good. The review is worth reading.
The Cold War was a bad time. It was a dangerous time. Victory was not assured. When Kissinger was in office, defeat seemed possible. When Nixon came to power in 1969, the country was in terrible shape, with only 1933 and 1861 being worse for a new president. American leaders made decisions under what they considered to be desperate conditions which we now question, or challenge, or repudiate. America allied itself with regimes which behaved very badly. Opposing and defeating the Soviet Union had many costs. We are too close to fully assess them.
Of the many books I have read about the Cold War, or events during the Cold War, the single best book covering the whole period which I have read is Norman Friedman, The Fifty-Year War: Conflict and Strategy in the Cold War
Suggested favorite books about the Cold War would be appreciated, in the comments.
UPDATE: Good Zenpundit post about, inter alia, the Nixon White House. Zen suggests some Nixonian literature in the comments.
UPDATE II: Zen provides a Cold War reading list, in the comments. Check it out.
Quote of the Day
The Russians, Chinese and Indians aren’t just a new collections of fools. They will no more drive humanity off a cliff than we did. With 3 billion new capitalists come 3 billion new answers.
Many will only see needs and demands. Some will see innovation and vision.
One point history makes clear: when markets are allowed to operate, efficiencies emerge. When markets are prevented or perverted (like in the socialist bloc), disaster triumphs.
Quote of the Day
I’m not sure I necessarily buy into the 5GW frameworks yet. Trying to nail 4GW Jell-O to the wall is hard enough. 5GW is like nailing said Jell-O while it’s still liquid.
Smitten Eagle, commenting on Zenpundit.
(I heartily concur.)
WWPZD?
Again, from the usual source: with reference to this … TBN is a sewer, Crouch is a parasite, and Stein is upholding the finest tradition of Hollywood celebrities, and I mean that in the worst possible way.
Lots of other people, I hope, will be quoting Jacob Bronowski today, from the “Knowledge or Certainty” episode of The Ascent of Man:
It’s said that science will dehumanize people and turn them into numbers. That’s false, tragically false. Look for yourself. This is the concentration camp and crematorium at Auschwitz. This is where people were turned into numbers. Into this pond were flushed the ashes of some four million people. And that was not done by gas. It was done by arrogance, it was done by dogma, it was done by ignorance. When people believe that they have absolute knowledge, with no test in reality, this is how they behave. This is what men do when they aspire to the knowledge of gods.
Science is a very human form of knowledge. We are always at the brink of the known; we always feel forward for what is to be hoped. Every judgment in science stands on the edge of error and is personal. Science is a tribute to what we can know although we are fallible. In the end, the words were said by Oliver Cromwell: “I beseech you in the bowels of Christ: Think it possible you may be mistaken.”
I owe it as a scientist to my friend Leo Szilard, I owe it as a human being to the many members of my family who died here, to stand here as a survivor and a witness. We have to cure ourselves of the itch for absolute knowledge and power. We have to close the distance between the push-button order and the human act. We have to touch people.
I’m not finished. I know PZ Myers. I’ve corresponded with him, spoken with him, and been a guest in his house. Nor was I there under false pretenses; he knows exactly what I am. I can think of few contrasts sharper than that between the way atheist liberal blue-state biology professor PZ Myers treated evangelical libertarian red-state corporate slug Jay Manifold and the way PZ is getting treated by these cretins.
It’s about time somebody started a “Christian Fans of PZ Myers” club, complete with WWPZD bracelets.
Did I mention that TBN is a sewer?