July 20, 2010

The High Stakes Test

The White House wonders "where did the jobs go?"   

Ironically, at the same time,  an Obama official, the Special Inspector General Neil Barofsky notes in a "scathing" report on the auto industry that Obama's 'Mandate for Sacrifice' Costs Thousands of Jobs:

the Obama administration rejected initial automaker plans which would have required relatively minimal dealership closings, insisting instead on far more drastic cuts -- as many as two thousand dealerships between the two corporations.

[W]hen asked explicitly whether the [Obama] Auto Team could have left the dealerships out of the restructurings, Mr. [Ron] Bloom, the current head of the Auto Team, confirmed that the Auto Team "could have left any one component [of the restructuring plan] alone," but that doing so would have been inconsistent with the President's mandate for "shared sacrifice."

Another New York Times piece says that federal job training programs don't work

Our ruling class is in the middle of what NYT columnist David Brooks calls  a "high stakes test" as to whether the progressivist policies of this Administration with the staggering complexity of the new health care law with its 183 new agencies and panels and commissions along with the new financial reform 2300 page bill of still more staggering complexity will help improve or damage the  health care and  financial systems we have now. 

This progressive era is being promulgated without much popular support. It’s being led by a large class of educated professionals, who have been trained to do technocratic analysis, who believe that more analysis and rule-writing is the solution to social breakdowns, and who have constructed ever-expanding networks of offices, schools and contracts.

Already this effort is generating a fierce, almost culture-war-style backlash. It is generating a backlash among people who do not have faith in Washington, who do not have faith that trained experts have superior abilities to organize society, who do not believe national rules can successfully contend with the intricacies of local contexts and cultures.

This progressive era amounts to a high-stakes test. If the country remains safe and the health care and financial reforms work, then we will have witnessed a life-altering event. We’ll have received powerful evidence that central regulations can successfully organize fast-moving information-age societies.

If the reforms fail — if they kick off devastating unintended consequences or saddle the country with a maze of sclerotic regulations — then the popular backlash will be ferocious. Large sectors of the population will feel as if they were subjected to a doomed experiment they did not consent to. They will feel as if their country has been hijacked by a self-serving professional class mostly interested in providing for themselves.

Richard Fernandez makes the case for the invisible hand, not The Dead Hand Again

The past for all of its faults contains a lot information about how things work. Human institutions — the existence of families, constitutional arrangements, etc — have evolved in response to concrete challenges. They are the way they are for a reason. Very often things seem simple because they are really complicated and unfortunately every now and again a generation of leaders comes along that sees no obvious use for this or that thing. And like a mechanic newly arrived on the scene, they pluck it out of the mass of roiling machinery without understanding its purposes or simply because they don’t like who invented it  and throw it away, believing in their wisdom or vanity, that the systems they inherited were conceived in ignorance, superstition and by NASCAR afficionados. Then without a backup, without an image, without the possibility of rollback the unexpected sometimes happens. Murphy shows up at the door. And looking up at that eminent Irishman they subsequently ask “why are you here?”

Thus the gold standard in public policy was to leave people to make their own arrangements unless there was a compelling interest to do otherwise. Because people do things for a reason, even if it is not clear to us why, and being in the innermost OODA loop, they are in a better position to change course if they get it wrong. The default activity of government, which operates in distant capitals was to do nothing. This attitude is captured in the folk saying, “if it ain’t broke, don’t fix it.” But that is so yesterday. None of those old sayings stands a chance before the great enterprise of transcendant Hope and Change. And what is that? Just change it and hope it works.

Now if that doesn’t turn out in the expected way, how about we try this. Instead of depending on the cumulative effects of generations of political dead hands, let’s try relying on the invisible hand — the aggregate arrangments of people in the marketplace — for a change. People if left to order their affairs usually do so sensibly. My guess is that the man in the street understands very well where the jobs went.

Posted by Jill Fallon at July 20, 2010 2:01 PM | Permalink