A WSJ Editorial on GE and President Obama–The Great Misallocators

Government “investments”””Mr. Obama’s favorite word last night””are by definition made for political purposes, rather than for their highest potential return. They are allocated by politics rather than by prices. In our view, that 4% of GDP a year could have contributed far more to economic recovery had it stayed in private hands.

But even if you believe that such spending prevented a depression, it makes no economic sense to keep those resources under political sway now that the recovery is underway. Would you rather have Congress allocating that 4% of GDP, or millions of individuals deciding among Apple, Gilead Sciences, or the next great idea?

The path back to faster growth, more jobs and a more competitive U.S. economy does not travel through more political mediation. Nor does it lie in endlessly easy Fed policy in a misguided attempt to refloat the housing bubble or revive the financial boom. A better economy requires policies that reward work and innovation, while letting capital flow to the companies and individuals with the best ideas. They might even be GE’s.

Read it all.


Posted in * Economics, Politics, Corporations/Corporate Life, Economy, Office of the President, Politics in General, President Barack Obama, The U.S. Government

5 comments on “A WSJ Editorial on GE and President Obama–The Great Misallocators

  1. Militaris Artifex says:

    The magnitude of government’s meddling in the economy, [i]i.e.[/i], directing public funds to private for-profit enterprises, is a direct measure of the degree to which that economy is [b]not truly[/b] a [i]free market[/i] economy. Rather, it is an indication of the amount of [i]rent seeking[/i] that is present in some segment of the populace. 19th century French economist Frederic Bastiat’s observation appears increasingly fitting in the case of the United States: [blockquote]”[i]Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.[/i]”[/blockquote]

    [i]Pax et bonum[/i],
    Keith Töpfer

  2. lostdesert says:

    Get govt off my back and out of my economy, get them out of my health care.

    If insurers are robbers and cheats, at least I can change my insurer – I cannot change my govt.

  3. J. Champlin says:

    Oh for goodness’ sake. Sometimes the WSJ is stimulating; this is not one of those times. Government does support research and technological advance. If it were military spending, no one on WSJ or in these comments would blink an eye, but of course government funded military technology often finds its way into civilian applications. Rails, schools, community colleges, roads . . . how much does the American economy owe to the interstate system created under Eisenhower? This is just purely ideological tripe, nothing more.
    #2 — in my experience, rates, plans, and exclusions are comparable across insurers; PPOs, HMOs, and EPOs are universal. We already live in a world of managed care and have for years. The only question is whether it is rationed in an even remotely reasonable way.

  4. Militaris Artifex says:

    [b][3] J. Champlin[/b],

    The question is [b]NOT[/b] [blockquote]whether it is rationed in an even remotely reasonable way.[/blockquote] I freely acknowledge that healthcare must be rationed. This follows directly, as day follows night, from the fact that healthcare is an [i]economic good[/i], not a [i]free good[/i].

    But the question is whether it is rationed by the appropriate agent(s). I would assert it being incontrovertible that, for the bulk of the populace of the United States, the agent who should be rationing one’s healthcare is [b]oneself[/b]. If you disagree I would ask you to cite one good and necessary reason why everyone should be satisfied with the healthcare and healthcare financing options that are defined by someone else, whether that someone else is the government or an employer? State control of the production and distribution of [i]economic goods[/i], essentially independently of which [i]economic good[/i] we are discussing, simply doesn’t work. And this is attributable to some very simple causes. First, no individual or group knows what the relative desires and priorities of each individual consumer are. Second, if they attempted to survey the populace to find out, by the time the results were collected, tabulated and analyzed, they would be [i]stale[/i], because they are subject to constant change even for many individuals.

    If you still disagree, then I have one very simple set of questions for you to answer. If you can answer them all in the affirmative, then perhaps someone else should be rationing your healthcare and its financing. The questions are:

    [blockquote]Would you be completely satisfied if someone else were selecting and purchasing:

    (1) Your groceries?

    (2) Your residence?

    (3) Your mode of transportation (auto, car, carpool, [i]etc.[/i])?
    [/blockquote] If you answered yes to all of these, then perhaps you belong to that subgroup of the populace for which those choices and healthcare choices should be dictated by someone else. However I seriously doubt that the majority of Americans would voluntarily agree with you after some reflection on the questions.

    [i]Pax et bonum[/i],
    Keith Töpfer

  5. lostdesert says:

    Rationing … God Help Us.