Have you ever noticed that the failed policies of politicians never really seem to be brought to light? How is it that despite their obvious shortcomings, the same policies are implemented time and time again? These interventions rarely have the promised effects, but they are somehow still deemed a success. In his book The Vision of the Anointed, Thomas Sowell explains the process by which politicians and their supporters are able to either create or take advantage of crises in order to increase their involvement in society. I thought it would be worthwhile to review this pattern as it applies to a more recent issue: the stimulus and bailout packages.
Starting with President Bush, and continuing into President Obama's term, the US government has paid out more than $11 trillion in stimulus money. Remarkably, there are many who believe that amount still wasn't sufficient. This article will show that both presidents believed the additional government intervention would solve our economic problems, not realizing that it was exactly that type of thinking that had led to the problems in the first place. The stimulus package has already passed through Dr. Sowell's pattern of failure, making it an excellent example for review. In even more current issues, such as the debt-ceiling increase, we are already beginning to see the early phases of the pattern. It is important that we understand this pattern so that we can identify and oppose measures that are contrary to the principles of true economic progress.
Dr. Sowell has divided the pattern of policy failure into four sections: the "crisis," the "solution," the results, and the response. He defines them in this way:
Stage One: The "Crisis." Some situation exists, whose negative aspects the anointed propose to eliminate. Such a situation is routinely characterized as a "crisis," even though evidence is seldom asked or given to show how the situation at hand is either uniquely bad or threatening to get worse.
Stage Two: The "Solution." Policies to end the "crisis" are advocated by the anointed, who say that these policies will lead to beneficial result A. Critics say that these policies will lead to detrimental result Z. The anointed dismiss these critical claims as absurd and "simplistic," if not outright dishonest.
Stage Three: The Results. The policies are instituted and lead to detrimental result Z.
Stage Four: The Response. Those who attribute detrimental result Z to the policies instituted are dismissed as "simplistic" for ignoring the "complexities" involved, as "many factors" went into determining the outcome. No burden of proof whatever is put on those who had so confidently predicted improvement. Indeed, it is often asserted that things would have been even worse were it not for the wonderful programs that mitigated the inevitable damage from other factors.
Stage One: The "Crisis"
President Bush introduced his bailout legislation on the grounds that "without immediate action by Congress, America could slip into a financial panic." Banks and other lending institutions possessed "toxic assets" and were either unable or unwilling to lend. By purchasing the assets and providing capital to the troubled banks, President Bush believed that it would steady the economy. In his official address he explained, "In the short term, this will free up banks to resume the flow of credit to American families and businesses, and this will help our economy grow." He claimed to support free enterprise, but then allowed banks to avoid the consequences of their bad investments.....