Welcome To The US Centrally Planned Economy

Early this month, I wrote this post concerning our government's involvement in GM's crisis, and its increasing role in planning the US economy with its selective bailouts and intrusive actions. I wrote, in part,

"It is simply wrong for our federal government to engage in such massive intervention as to be lending private-sector companies money, in hopes of avoiding their demise.

How can our government possible know, better than the natural forces of our markets, that the best use of, for example, some building in Flint, Michigan, is as a GM plant, rather than the new home of some entrepreneur's business?

Isn't this what the Soviet Union tried, and ultimately found to be inefficient, unworkable and a failure for most of the 20th century?

Who among us truly believes that our federal government is more skilled than consumers and investors in the selection of those business which ought to survive and prosper?

Government isn't the right institution to select our economy's winners and losers. For that, we have a process which we have trusted for most of our country's life- our freely-operating, private capital and consumer markets."

Then, just yesterday, I read the Wall Street Journal's article describing our president's recent economic address. The piece quoted from the speech,

"We must build our house upon a rock. We must lay a new foundation for growth and prosperity- a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad."

I don't know about you, but I find it chilling that a president is decreeing what our economy's allocation will be between consumption and investment, domestic consumption and exports.

As I noted in my prior post, the Soviets tried this from the 1930s until their country failed, economically, in the 1980s. Centrally planning never worked, except in a limited sense during wartime, as was true in the US.

But that was only because government essentially prohibited consumption of capital goods and many foodstuffs, in order to use such items for war production.

It's also ironic that the largest spending bills and increases in our deficit occur under someone who claims to be returning America to a 'save and invest' ethic.

It's preposterous. And our prior president didn't do us any favors, either, both by failing to veto excessive Congressional spending and by engaging in multiple, unnecessary sector bailouts at taxpayer expense.

Among the 'five pillars' of the current president's envisioned new US economy mentioned in the article are: "renewable energy investments to create jobs and lessen the nation's dependence on imported oil."

Again, I am frightened that a government official thinks he can better judge the correct mix of US energy usage, pricing and employment than can the numerous firms which constitute that sector.

America has succeeded for centuries by employing prices as signals to either accelerate or decelerate investment in various sectors, technologies and activities. Why should we now depart from this practice and succumb to government-mandated targets other than prices?

Does any thinking person really believe that civil servants without experience better know how to run our energy sector and plan our energy usage than all of us, consumers and producers, by engaging in normal activities, in light of market price signals?