September 12, 2008

Straighter talk than most people care to hear

Because I do a daily stock report on the radio, I get asked questions like "can't the president or that Fed guy do something about the economy?"

People are not pleased when my answer is "no."

Neither the president nor the Fed chairman can solve our woes with the stroke of a pen. Nor should they.

The free market isn't perfect, but I believe history has shown that it's better than the alternatives.

The free market may look pretty ugly right now, but that's the result of individuals and corporations over-reaching themselves.

The free market, generally speaking, repairs itself over the long term.

Bob Barr, the Libertarian candidate for president, brings this issue up in a press release issued this morning. He says he will not promise economic prosperity. "Presidents do not control the economy and could not be trusted to do so even if they had that ability," he writes.

Barr's observations on the role of the federal government are so cogent, I'm going to excerpt several of them for you:

“I won’t promise to ‘invest’ in new energy technologies. That is the job of the private sector. The government has no money of its own and has an awful record in choosing economic ‘winners’ and ‘losers.’ ”

“I would not, as president, ensure that every child has an education, make sure every American has health insurance, or provide job retraining for every worker. No president can honestly make those guarantees. And none of these are the responsibility of the federal government.”

“The president takes an oath to preserve, protect, and defend the Constitution. ... The president’s job is not to run America, or the American economy, or any particular industry. The president’s job is to be the chief executive of the federal government."

Barr's position, and that of many of the country's founders, is that the federal government's role should be limited to truly national matters, e.g. foreign policy, defense, international trade and interstate commerce.

Remember that, at the founding of our country, the union was seen as a confederation of independent rebublics. Right up to and through the Civil War, a subject of frequent debate was whether one's primary allegiance was to one's state or to the union.

The Libertarian party seems to be taking the old anti-federalist stance, calling to minimize the federal government and leave most matters to the states.

As for myself, I'm rather a Hamiltonian Federalist. But I do agree that some matters—education and health care are among them—cannot be solved by the free market. I also agree, as Mitt Romney pointed out repeatedly, that states need more latitude in dealing with such matters.

The federal government cannot remain totally aloof from adressing problems in the economy, health care, and so on. But the electorate would do well to remember that the federal government's power in such matters is limited, and rightly so.

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