Freeman

THE CALLING

New Year’s Resolutions for Politicians

And one for us all.

JANUARY 01, 2014 by STEVEN HORWITZ

[Editor's note: This article was originally published in January 2011]

This week’s “The Calling” is coauthored with Jennifer Dirmeyer, assistant professor of economics at Hampden-Sydney College in Virginia.

One of the most popular customs at the beginning of each new year is to reflect on the people we are and make resolutions we hope will turn us into the people we wish to be.  Recognizing that we face temptations, we feel the need, like Ulysses facing the Sirens, to bind ourselves in order to avoid those temptations.

Government should do the same.  But since we recognize that self-restraint is rarely a strength of politicians, we offer some help.  Here are three New Year’s resolutions for politicians and bureaucrats.  We offer them with only the faintest hope that they will be adopted. Because of the faintness of that hope, we offer one final resolution for the rest of us.

1. Quit Printing. Every year many people have to resolve to quit smoking because nicotine is so addictive.  Just as smokers are addicted to nicotine, so politicians are addicted to the short-term benefits of printing and spending money.  Just as smokers get antsy for that nicotine calm, politicians get antsy for that slight uptick in consumer spending, the increase in exports, and the stability of flush banks that expansionary monetary policy produces.  Like smoking, however, the long-run effects are deadly, bringing us only inflation and insecurity.  So this year let’s have the government resolve to quit printing.

2. Indulge Less.  Many of us resolve to drink less in the coming year.  We are perhaps tired of the stupid things we do under the impaired judgment that alcohol can produce. (Think about how much less bad dancing we’d see.)  Bad economic policies can arise out of impaired judgment, too.  Intoxicated by their power, federal, state, and local governments seize the opportunity to “do something” in the face of anything they can label a crisis.

Unfortunately, policies conceived out of fear by politicians voting under the influence of intoxicating public mandates often end up being the political equivalent of bad dancing or, worse, reckless driving.

And drinking another round won’t make the dancing any better.  Remember that second round of bailouts that was supposed to make banks start lending?  How about the third?  How many “QEs” can we indulge in before we realize that the lampshade on the head is not funny anymore? It’s time for politicians to sober up and move away from the bar of power.

3. Stick to a Budget.  We all know that financing our lifestyles with credit cards is not really a long-term solution.  Why do we do it?  It’s easy to see the big-screen TV we buy today, but it’s hard to see the car or couch that we won’t be able to afford later because we spent resources on the TV. Eventually the piper must be paid, and “make more money” is not always a realistic solution.

Future Costs

Recognizing future costs is even harder in politics. But the borrowed resources that it takes to provide Wi-Fi to rural areas, new road signs along the highway, and extended unemployment benefits have to come from somewhere, and someone is losing as a result.  Like the rest of us, politicians need to start asking, “What is this really going to cost us?” before they tell the Treasury to max out another public-spending credit card.

Long-time readers of this column will rightfully be skeptical about how effective such resolutions are likely to be, given the incentives facing politicians.  Still, it doesn’t hurt to remind them and ourselves of the issues at stake.  But given our skepticism, we offer one last resolution for all of us:

Get involved!

We could have as easily called this one: “Don’t expect solutions from day-to-day politics, but be part of the debate over ideas.” Certainly politicians who genuinely care about freedom are better than those who don’t, but all of them face the same incentives for reelection, which normally involve spending in ways that benefit their constituencies and responding to the interests of the wealthy and powerful, not the average citizen.  So even as we offer better ideas to political actors with one hand, we always need to be working with the other hand to educate the public and the opinion-makers.

In the long-run, meaningful political change comes not from the political process itself, but from a citizenry that is well-read and willing to engage in the fight for freedom.  Voting may not change much, but writing letters to the editor, attending local meetings, and using the Internet to spread good ideas will have an impact in the long run.

For the New Year let’s hope that politicians take our resolutions seriously, but on the pretty good chance that they won’t, let’s resolve ourselves to work for freedom in all the ways we can.


Filed Under : Inflation, Government Spending

ABOUT

STEVEN HORWITZ

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Microfoundations and Macroeconomics: An Austrian Perspective, now in paperback.

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