Dazzling Knowledge

Thursday, October 26, 2006

The Great Paradox of Political Economy

Jonah Goldberg has an article on the absurdity of claims politicians make about the economy. My favorite is how all of these parasites claim to "create jobs." They do nothing. We do everything.

"Meanwhile, the single-most underreported good-news economic story of the 21st century so far is the explosion in American productivity. From 2000 to 2004, productivity in the United States grew by 17 percent. That is a staggering number which tells us more about the long-term health of the American economy than statistics about the GDP, unemployment or wage growth. Those four years — which include a recession and 9/11 — are almost better than all of Bill Clinton’s eight years in office (which also saw impressive productivity growth).

This isn’t a partisan point. Bush and Clinton deserve virtually no credit here. The credit goes to American ingenuity and technological innovation (chiefly in the form of computers finally paying off on a massive scale). But these improvements aren’t easily captured in the statistics that bureaucrats are paid to keep on top of, and politicians can’t claim credit for them, so the media ignore them. Collectively, policymakers are like a man looking for his car keys only where the light is good.

This predicament is a byproduct of the great paradox of political economy. Free markets are better than any other system in the world at solving those things we want economics to solve. But it doesn’t feel that way. Markets shake things up and make us feel insecure even as the big picture continues to brighten. People want guarantees — even though the lack of guarantees makes American ingenuity possible — and politicians are only too happy to oblige."


Blogger Chamomiles Davis said...

Politicians who take credit for an economic upturn are like weathermen who take credit for a sunny day.

8:31 PM  

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