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Has America Lost Its Mojo?

Government Solutions Never Work

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

Dodd-Frank was a waste of time. Now there is a lawsuit pending that might even make it unconstitutional. I hope it is ruled unconstitutional, because while the sentiment for Dodd-Frank may have been correct, the way it was written and the way it ultimately will be implemented would have curtailed freedom.

Ironically, this week we ought to hear from the US Supreme Court on the constitutionality of Obamacare. I hope they find that act unconstitutional too.

Wouldn’t it be ironic if the two signature elements of the Obama administration were both ruled unconstitutional? Further irony is that Obama was a guest lecturer at the University of Chicago Law School. Too bad he didn’t learn anything about the Constitution and only concentrated on civil rights.

Whenever the government decides to become involved, we lose freedom. Obamacare, Dodd-Frank and the Patriot Act are Orwellian named pieces of legislation that infringe on our personal rights. I’d like to see them repealed.

In the case of Dodd-Frank, I have been writing since its inception that it would do nothing to save the financial system. All it does is increase costs, increase barriers to entry and decrease competition. Big pieces of legislation never favor the independents, the middle market, the little guys. Only the big guys can take advantage and survive.

What would have saved the financial system would have been to let them all go broke. The creative destruction of capitalism is a great incentive to “help” companies make good decisions. We would have been better off with busted banks in 2008 than we are with Dodd-Frank in 2012.

Since Dodd-Frank was passed, the middle market in banking has suffered. Those banks are going out of business. In commodities, the cost to operate a mid to small size clearing firm went up-and many of those firms are changing their business model. Instead of encouraging more transparency, we get less. The market isn’t better served because of Dodd-Frank. More people slip through the cracks and now some bureaucrat will develop another government program to take care of them.

The government regulators know less about where capital is flowing and who is trading it today than they did prior to the crash that began in August of 2007. Is that scary? Not really. I have more fear about the economic imbalances the Fed is building into the system with years of 0% interest rates and the amount of money the US is printing.

But big government types, liberals and machine Republicans, love big legislative efforts to solve problems. As Reagan said, “they spin these webs”, then everyone is tangled up in them and they go on to the next one.

The problem with big government types is they don’t trust people. Their default attitude is that normal people just aren’t smart enough to make good choices. When attitude’s like that are in power, you get micromanaged legislation that eliminates Big Gulp’s. Once after a debate party in 2004, a university professor said to me, “Wouldn’t it be better if just people like us could vote.” That sums up the left wing attitude in a nutshell. No faith in people. No faith in markets.

One day I would love to hear a news reporter ask a question to a politician, “What are you going to do about it?” and have the politician respond, “Nothing, I am going to make sure there is a free market that can figure it out.”

Markets are always better than government solutions to problems. The pursuit of profit will fill niches that governments can never fill. Capitalism does a much better job of raising standards of living than any government program ever will.

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