Friedrich Hayek warned more than half a century ago that central planning doesn't work. Here’s why:
- Central Planners (government) makes a plan
- The plan includes specific expectations
- The expectations are never, ever, realized
- A “crisis” ensues
- So the planners demand more control
- And create more plans
- Ad hoc
- Willy nilly
- So you must wait for things to settle down to make your decision
Today’s Wall Street Journal article about the fiscal cliff demonstrates the futility of central planning:
"We're all sitting on the sidelines right now wondering what's going to happen to us," said John Odland, chief financial officer at MacMillan-Piper Inc., a freight-transport firm in Seattle. "A lot of my contemporaries are feeling the same way, saying, 'Let's just wait and see what these knuckleheads do.' "
Why should private, free citizens have to wait on government for anything?
Here’s a better solution: get the damn government out of the economic planning business.
It’s true that individuals are no better at planning than government experts. But they’re no worse, either. The difference, then, is the number of people affected by a plan that doesn’t work.
If Joe Shit the Ragman’s plan for his business or his family or his vacation fails, who’s affected? Joe, maybe his wife, maybe his employees. And it stops there.
If Barack Obama’s plan or Ben Bernanke’s plan or Tiny Tim Geithner’s plan for the economy fails, who’s affected? All of us.
Moreover, if Joe’s plan fails, it’s up to him and him alone to sacrifice while a better plan takes shape for him and is family.
But if a government plan fails, the government invents new powers, which always come at the expense of your personal power, new taxes, and new plans. From the same WSJ article:
Each scenario involves prolonged uncertainty. Most consumers would start to pare their spending after receiving smaller paychecks due to higher payroll-tax withholding. Income-tax refunds for 2012 could be delayed while the Internal Revenue Service programs its computers to account for tax changes. Government agencies could start cutting back, hurting employees and suppliers. Many other employers likely would slow hiring or cut jobs. And investors could eventually look at those risks and send stocks lower, threatening a downward spiral in consumer and business spending.
We are throw more than good money after bad; we are throwing away good lives after bad.
The only solution to the fiscal cliff problem is to STOP CENTRAL PLANNING, restore power to individuals to make decisions, and reinvigorate a sense of community so people are more likely to help their neighbors.