The lesson here – for Mr. Bernanke, and everybody else– is that politicians and government bureaucrats DO NOT use our money as wisely as private individuals and organizations. Nobody with their wits about them would believe for a moment that doling-out “free” stuff from the government would expand the economic pie. Yet “stimulus funds” – money allocated by the Congress and President Obama specifically for the purposes of “stimulating” the economy – were spent on things like birth control and TV gadgetry, while the promised “shovel ready” infrastructure projects remain a mystery.
When private individuals and groups are left to handle their own money – and allowed to feel the pain if they fail to manage it properly - then they usually manage it in a wise way. But when politicians and bureaucrats spend our money, they’re spending somebody else’s money – and when it’s somebody else’s money, it too easy to spend it in foolish and self-serving ways.
And here’s another lesson: Even the smartest of government “leaders” often cannot handle our money better than we can individually. I still remember the Obama-Biden campaign’s “mixer” for young professionals that I attended back in September of 2008. I was a “fly on the wall” at the Phoenix, AZ hotel suite, as lots of MBA’s and JD’s and VP’s mingled around, buzzing about candidate Obama’s intellect and all the “super smart” people he would bring with him to Washington to fix the economy. By then it was apparent that Phoenix, the second-most rapidly rising real estate market in the U.S. was in nosedive mode. But Obama had a “mortgage bailout plan” that was going to fix everything – or so the party-goers told me.
Today people with late payments and bad credit scores get loan modifications, while those with current payments and good credit can’t get a return telephone call from their bank. The “super smart” people who went to Washington intent on “helping those who are hurting” have transformed the financial system into a structure that coddles the reckless, while punishing the productive.
And I wonder if Mr. Bernanke – or anybody else in the Obama Administration – has ever thought of this: In order for an economic system to function, every participant in the system has to be treated like they are fully human. From the poorest entry-level worker, to the wealthiest executive and business owner, we all must be treated like the free, grown-up, fully dignified human beings that we are meant to be. This means we must be “free” to succeed, “free” to fail, and incentivized to do the right thing.
Yet in the Obama economy, the poor are told “you can’t accomplish it on your own.” The rich are told “you’ve accomplished too much.” Business owners are told what they can and cannot do with their operating capital.
All these “lessons” really amount to matters of human character, and no amount of central bank tinkering can render them unimportant. These lessons are available to all of us, right now. Even to the man with “no idea.”
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.