I’m no fan of President Trump, but I am a fan of facts. Nancy Liebrecht’s recent column (“We’re paying for Trump’s ignorance,” Oct. 6) purported to be about facts, but I have issues with at least two of her statements. First, she claims that the economy was “roaring along” when Barack Obama’s presidency ended. Actually Obama presided over one of the slowest recoveries on record after a recession. The best economy since World War II was on Donald Trump’s watch just before the pandemic hit. And unemployment for Blacks and Latinos was at an all-time low.
How much of this was due to Trump? It’s difficult to know because, as economists like to point out, we will never know the counterfactual. But my opinion is that his deregulation and tax cuts did contribute to the booming economy (although it was irresponsible to cut taxes and not cut spending). I agree that his trade war with China hurt the economy and his anti-immigrant stances slowed the influx of talented people who could help the economy grow. His record on the economy is a mixed bag, but probably more positive than negative. I have lots of problems with President Trump, but as far as the economy goes, I think we have to give him his due.
The other issue is her statement that politicians and bureaucrats can run the economy better than businessmen. First, in a market economy, no one “runs” the economy. A market economy just happens as the result of free people making free choices. This is what has been called “spontaneous order.” A market economy is the product of human action but not of human intention. It’s a miracle that has led to the “great enrichment” that has taken place over the last 200 years or so.
Second, any student of history will note that when politicians and bureaucrats attempt to run the economy, the result is always disastrous. The most recent examples are Venezuela and North Korea, but also remember Soviet Russia and China (before they wised up and allowed market reforms). The idea that someone knows how to run an economy is the “fatal conceit” written about by Nobelist Fredrick Hayek. Looking at history, how can anyone think that politicians and bureaucrats know how best to run an economy. And beware of people who say it will be different this time.
But on the other hand, businessmen should not run the economy either. As Adam Smith pointed out, businessmen will occasionally collude. And we already have too much of “crony capitalism” including tax breaks for special interests.
Yes, the government does have a role such as to provide a social safety net among other things. And some regulation is necessary. But regulation can be excessive and stifle growth which I believe happened under the Obama administration. The role of government should be as limited as possible to allow the most prosperity for the most people. A market economy is not perfect, but it’s better than the other options.
Cox is a a retired cardiologist. He lives in Blacksburg.
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