Who’s Behind the Wheel?0
By Frank J. Rich
Few wish the worst to happen. We are ever hopeful in most things, not least our children. In the midst of the late economic malaise we might add “work” and “economic security” to a growing list of the “hoped-for.” More people were out of work or “gainfully employed” than at any time, save one, in the history of the U.S. But when things aren’t going so well for us we look to others for help and to blame.
Such is the case today, and there is plenty of blame to go around. Even after this protracted global meltdown, the most severe economic slowdown ever short of The Great Depression, the discussion is dominated by what “governments” can do to pull us out of this downward spiral. And since we have largely relinquished control of our fiscal, monetary, and socioeconomic decision-making to government, it is reasonable that we look there first for solutions. But is the wrong person in the front of the car?
Most agree that “growth” is the issue. Virtually every sector is declining but health care and government—the things “we the people” are unable to afford. If the argument is that both are out of control, does it make the most sense to let those institutions solve their own problems and also others—housing, credit debt, investment, exports, energy independence, overrun borders, and infrastructure? The condition of America’s roads and bridges, for example, is among the worst of developed nations. According to the ASCE (American Society for Civil Engineers), roughly 33 percent of America’s roads rate below “acceptable ride quality,” costing us each between $300-$400 a year in vehicle repairs. And America’s deadliest roads are closest to home, not the superhighways that speed us between cities. Worse, 28 percent of America’s 600,000 bridges are structurally deficient or functionally obsolete.
But if growth is the issue that solves most problems, who is responsible for it and how is it accomplished? Simply, there is no clear evidence that government work or “stimulus” programs are successful at solving unemployment or growth objectives. They are slow and typically lag the collective results of individuals acting on their own behalf. Okun’s Law reveals that a 1 percent reduction in the unemployment rate requires a GDP growth of 2 percent higher than the annual growth trend. Today that trend is 2.5 percent, which means we need a 4.5 percent growth rate to reduce unemployment to 8 percent.
According to Milton Friedman, among the great economic thinkers in modern history, “… there is no alternative way so far discovered of improving the lot of ordinary people that can hold a candle to the productive activities that are unleashed by the free enterprise system.”
Life is hard, but opportunity is real for those who seek it, and by their own hand. America was built on the backs of immigrants whose hope lived in their willingness to work, their genius for finding opportunity in their circumstances, faith in themselves, the freedom to act on their desires, and a system of free enterprise that encouraged it. When you look around you and inside you’ll find all these things. If you read “government” in these words you have failed to see the opportunity in yourself to get behind the wheel.
Happy New Year!