All Commentary
Tuesday, November 29, 2016

If All Had Gone According To Plan

The New York Times editorial page imagines that nothing could have ever gone wrong with the overtime rules.

The apologists for centralized regulation of economic life sometimes seem to be engaged in a kind of self parody. For example, the New York Times editorial condemning the judge who stopped the imposition of new overtime rules runs as follows:

“If all had gone according to plan, as many as 4.2 million additional workers in the United States would have started earning time and a half for overtime, effective Dec. 1. But that plan, developed by the Obama administration’s Labor Department in an exemplary rule-making process over the past two years, was blocked on Tuesday by a federal judge in Texas.

The judge’s ruling is a triumph for economic injustice and income inequality. Though temporary, it leaves little doubt that he will strike the rule down permanently. The Labor Department is considering an appeal. But a Labor Department under Donald Trump could simply drop out of any case inherited from the Obama administration.”

Imagine if the world really did work this way. If you want people to get a raise, you merely need to get a bureaucracy, with an “exemplary ruling-making process,” to issue an edict. On this day and by this law, wages will rise! And thus will wages be risen!

To the advocates of economic planning, the problem is never the plan itself but something else.What possible reason would there be not to do such a wonderful, compassionate, intelligent, benevolent thing as to cause everyone’s standard of living to rise by decree? It can only mean that you are not “paying attention to the needs of the working people.” You favor injustice and inequality! In other words, you are just being a jerk.

Better intentions will save the world!

Surely we are right to expect a slightly deeper level of economic understanding from these writers. Or maybe that is hoping too much.

Notice the proviso at the very top of this editorial: “If all had gone according to plan….”

Reflect on the history of economics in our own time, and complete that sentence on your own. In accordance with Internet slang, let’s shorten that seven-word proviso as IAHGATP.

  • IAHGATP, Obamacare would have lowered premiums, extended access, let you keep your current plan, and spread health and well being to the whole population.
  • IAHGATP, the Iraq War would have brought freedom and prosperity to the country and inspired a region-wide embrace of democracy.
  • IAHGATP, no one would ever have driven cars over 55-mph.
  • IAHGATP, Richard Nixon’s war on pot would have ended weed smoking, stopped the slide into drug abuse, and inspired universal sobriety and temperance.
  • IAHGATP, the Cuban revolution of 1959 would have thrown out a despot and allowed the people to live in peace and build beautiful lives for themselves.
  • IAHGATP, Soviet crop yields under Stalin would have broken new records for agricultural productivity and fed the world.
  • IAHGATP, the 18th amendment would have ended the production and consumption of alcoholic beverages in the US.

You can play this game all day. When it comes to grand, ambitious government programs imposed to make the world more wonderful, nothing ever goes according to plan.

If you doubt it, talk to anyone who has served in the armed forces. I did the other day, while sitting on an airplane next to a 25-year veteran. He knew nothing of my political and economic views, but said to me with a matter-of-fact style: “the key to understanding government is that so long as it is in charge, nothing ever works according to plan.”

It Surely Would Have Worked….

But to the advocates of economic planning, the problem is never the plan itself but something else: unexpected weather, fickle consumers, disobedient producers, lazy bureaucrats, noncompliant citizens, greedy businesspeople, pesky judges, and so on.

The Times invoked the phrase to condemn the judge for stopping the plan but actually most American businesses had already gone through the stunning trauma of dealing with the new overtime rules. They were newly applicable to many millions of workers.

Sure, many people received salary increases but not because the law made it possible. It was because businesses were trying to escape the confines of the new regulations, which would have imposed limits on working hours that the employees themselves do not want. These salary increases come at the expense of new hires, because it turns out that laws do not cause new resources to emerge out of nowhere. They have to be transferred out of existing funds.

Millions of others face the prospect of being moved from salary back to wages, a downgrade in employee status that verges on humiliation. And this happened solely because of the need to comply with new regulations.

And think of the other millions of young and ambitious workers who have been told they must not work longer than the government-allotted maximum, no matter how much they love their jobs or want to excel.

So long as government is doing the planning, nothing goes according to plan. No, according to the Department of Labor, the new administrative edict, would magically create higher wages or more leisure time which will be used for going to the gym or hanging out with friends. I’m not exaggerating. You can watch the video, the theory behind which is based on bad economic theory to begin with.

All of this happened before the judge acted and stopped the process of retooling and reorganizing, though the damage was largely done.

This, and not the law itself, says the Times, is the reason that all will not go according to plan. It’s as if the editorial writers can’t imagine another possibility, since surely we live in a world, despite all evidence to the contrary, in which government’s good intentions always yield good results.

The reality is that so long as government is doing the planning, nothing goes according to plan. There is only one sure result: people will be denied the chance to structure their lives in accord with their own assessment of their personal interests.

“The planner,” wrote Ludwig von Mises in 1947, “is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at one thing only: the exclusive absolute preeminence of his own plan.”