Tuesday, December 23, 2008

The Sovietisation of America

A recent article in Bloomberg discusses galloping statism around the world. All theoretical concerns aside as to subpar growth, and suboptimal investment decisions - we see the core problem being this: Beyond the domain of rudimentary public services, central planning creates bogus livelihoods in bogus industries. Take airline luggage inspectors. In the USA, the TSA employs about 45,000 screeners, slightly more people than the number of people killed each and every year on USA highways. We wonder how many lives the screeners have saved. Is this truly a good use of scarce economic resources in a contracting economy?

How will real needs be met if jobs are only created within or by the hands of government bureaucracies, and lost elsewhere? If the proposed make-work programs were along the lines of say, public transportation, truly affordable housing, or even beautification for heavens sake, we would not grumble so much. There is, after all, much to be done to make a smooth transition to a less affluent society. But why the largess for roads, auto makers, and ethanol? Soon enough all the highways will be to nowhere, as private motorised transportation becomes impossibly expensive for all but the wealthy.

In the waning days of the Soviet Union "people pretended to work, and the government pretended to pay them." Meeting real needs was largely left to the informal economy. Why do the government of the USA and its imitators want to recreate this tragedy?

No comments: