The gist of Zachary Karabell’s latest Bloomberg Businessweek column seems to be that Americans cannot rely on government alone to get the nation out of its economic doldrums:
The government is one vital element among many, and society will thrive only when neither too much nor too little is expected of it. This may not be as stirring as revolutions and crusades, but it’s better to accept limitations and work constructively within them than pin our hopes on policies—such as the massive attempts to juice consumption that the U.S. government has repeatedly tried—that are bound to disappoint. Bold plans with no chance of success won’t change employment patterns or make a nation competitive and compelling in a global system that is increasingly complex and dynamic.
So far, so good. Roy Cordato has offered similar thoughts about the likelihood of government stimulus programs to stimulate anything worthwhile.
But Karabell throws at least a couple of rotten apples into his barrel. Among them is the following contrast of liberal and conservative approaches to government:
Liberals believe that if government does its job well, prosperity will follow. Conservatives argue that good government is less government, but they are no less obsessed with the role that Washington plays. Our entire political and economic debate takes place in the context of a shared assumption that government determines the nation’s collective economic success or failure, either because of the harm it does or because of the good.
Well, no. My best guess is that liberals and conservatives both endorse the concept behind the first sentence. They disagree on government’s proper role. Liberals (statists and collectivists, to be more precise) believe that role is large. Conservatives (or classical liberals) believe that role is limited. And the extent to which government “determines the nation’s collective economic success or failure” depends on the extent to which government stands in the way of the entrepreneurs who move an economy forward.
Perhaps more disappointing is this additional observation.
When Herbert Hoover refused to intervene in the wake of the financial crisis in 1929, he was adhering to a 19th century worldview: Government’s role in the life of society was less important than the natural ebbs and flows of the market. The Great Depression and New Deal banished that philosophy to the extreme periphery.
No, Hoover was no Calvin Coolidge. Karabell might realize how much economic damage resulted from Hoover’s activist approach if he took the time to consult Amity Shlaes’ The Forgotten Man.
