Tuesday, May 19

Faux small governance vs. borrow-and-spend

"Jordan" wrote:
I’m pretty sure the never-ending debacle that was the Bush administration turned the Millenials off to the idea of ’small government’ for good.
In terms of political perception, I think this is true. The Bush administration's "compassionate conservatism" managed the remarkable feat of both:

(A) Giving us a larger and more intrusive government.
(B) Badly tarnishing the name of small government conservatism.

Jordan continues:
The debate among people my age, largely, is about government’s effectiveness, and how it can best interact with business to achieve the policy goals we want (green energy is a prime example). I think we view corporations and government as a continuum of institutions, not in the sense that they’re all “the man,” but in the sense that they all have a particular role to play in support of one another.
"Druder" opines:
This is not exactly surprising. Big government looks much more attractive when it’s free. People are getting a pretty nice return on their tax dollars currently with our massive deficits, while the national debt is something no one feels. Assuming we don’t have a Zimbabwe style debt currency crisis (fingers crossed), eventually people will have to be taxed to pay for all this stuff. This is not to say that we shouldn’t tax more and provide all this government action to make a better society. I’m just curious as how views will change when people actually have to pay for it.
That's the problem with government: it does not create wealth, it only regulates its distribution.  Within sensible limits--e.g. providing for the common defense, building a transportation network, mandating that food have nutrition labels--this can be a good thing.

Meddle with goods and services, however--like regulating and subsidizing uncompetitive schools, agriculture, healthcare,  and energy technologies--and you end up with the many nasty boondogles we have today.

1 comment:

  1. "That's the problem with government: it does not create wealth"

    That's too simplistic and reductionist a framing for my liking. I can't remember the conservative Nobel laureate economist who wrote the book I'm thinking of at the moment (that I read back in business school) but there were several chapters devoted his concept of the symbiotic relationship between business and stable governmental systems. The idea is that in countries with chaotic governmental systems -- where graft is ever-present, or ruling parties are deposed every few years, or government fails to impose sufficient regulation to temper the wild swings of the boom and bust cycle, or when government engages in hyper-regulation (often with state control of industry) -- the net result in terms of generation of wealth from business is significantly less than in countries with a stable democracy, a stable government for a period of time, and precisely the right balance of regulation to temper the wild swings of the boom and bust cycle (especially with regard to the inherently economy-crashing effects of out-sized banking industry profligacy. More simply, the proper level of government in a society (both in terms of intrusive and hands-off policies) results in a much bigger greater potential well of profit to draw from, as compared to the much smaller well of profit that exists in countries with governments that are either too hands-off or too hands-on.

    I will try to track down the book for you. Very interesting reading.

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