However, experts used by the government and the political class always seem to disappoint us. Consider some of Mr. Kling's examples and others that I have added:
- Political class economic experts said to spend about $800 billion to rescue the financial system from itself. However, two years after spending the $800 billion, the biggest banks are bigger than ever, falling short of the objective of having no banks that are "too big to fail." Within months of getting government taxpayer money, many of the banks were only too eager to return that same money, indicating that maybe they were not all that close to failure as the experts told us. Today's banks are not lending to small businesses as much as as the experts are saying they should be doing, another expert forecast that did not pan out.
- These same economic experts said to spend about $800 billion to save and jump start the economy. These experts told us that if this taxpayer money was not spent, unemployment could go as high as 8%. The political class listened to their experts, spent the money, and unemployment zoomed straight up to around 10% and has stayed there for a long time.
- The political class experts that wrote the massive health care reform legislation told us that it would produce wonderful health care results for every American just like a similar bill did in Massachusetts which was passed several years ago. However, these experts are also likely to be proven wrong. In Massachusetts, health care costs have not been contained as promised by the government experts, emergency room visits have not gone down as predicted by the government experts, and the requirement that every state resident purchase health care insurance is basically ignored and postponed by many until they get sick and need medical attention.
- In July, 10201, the Washington Post did an intensive investigation into the government's national security approach that the political class and their security experts have put together. The article found that our security apparatus is overly complex, overly bureaucratic, and overly expensive. Despite this overkill, a single Nigerian gentleman almost blew up an airliner over Detroit and a single American citizen almost exploded a car bomb at Times Square. All these expensive government experts and their procedures and technology failed to detect either of these potentially fatal, and quite simplistic, schemes.
- Federal Reserve, Treasury Department, and Securities and Exchange Commission (SEC) experts were supposed to monitor and manage the U.S. economy in order to keep it on an even keel. However, none of these experts apparently understood the downside risk of no money down mortgages, encouraging home ownership by people that were not qualified financially to own a home, or other shaky financial instruments. If theses experts did not see the biggest economic downturn coming ahead of its smashing into the economy in 2008, what makes us think that they can get us out of the mess they never saw in the first place?
- Once the economy crashed, these same experts came up with plans to fix the problems that they helped create and never saw coming. They instituted plans like Cash For Clunkers, economic stimulus programs, Cash For Appliances, home mortgage programs, etc. The hilarious thing about these experts' programs is the precision that these experts claim to measure their programs. They claim that Cash For Clunkers resulted in a certain amount of incremental auto sales and the economic stimulus programs created a certain amount of incremental jobs. One wonders why we should believe their numbers on these incredibly difficult and complex things to measure when the did not foresee the "Great Recession" until it hit them in the face. Tough to believe their estimates of the number of leaves on a single tree when the did not notice the forest.
- What political class automotive expert said it was a good idea to give Fisker Automotive a half a billion dollar government/taxpayer loan guarantee to build high end hybrid cars that will be made in Finland? The initial model from Fisker will cost about $100,000 and subsequent models will cost about $40,000, putting both models in the high end, niche category of auto sales. I am not an automotive expert but why niche and why Finland? It would seem obvious that domestic car manufacturers would have been a better job and technology partner for U.S. taxpayer dollars. If Fisker was such a great investment, private investors, with something to lose if their experts are wrong, would have eventually found and invested in the Fisker products.
- What political class energy experts said it would be a great idea to give the nuclear energy industry over $50 billion in government/taxpayer loan guarantees to build seven or so nuclear energy plants in the southeast U.S.? The nuclear energy industry said they would not build the plants if they used their own funds, too risky of an investment, so what government experts thinks it makes a good idea to use taxpayer money for the projects?
So what seems to make political class experts so bad but experts we rely on for our teeth, our lawn and our iPads, so good and effective? Mr. Kling proposes a rational explanation. In his view, government and political class experts are linked to a tremendous amount of power, the power of the government's size and reach. If a private sector expert screws up, then that expert and possibly the company he works for have some problems but the damage is localized. These private sector experts are more likley to be very careful since their expertise is directly linked to the performance they are supporting. If an error in judgement occurs, private sector experts are much more likely to adjust their theories and approaches, learning from their experience.
When a government expert screws up, the potential for bad outcomes is significant. Witness the financial meltdown/Great Recession. Government experts in the Federal Reserve, Treasury, and SEC organizations did not do their job properly and the result was catastrophic for so many American families. In addition, government experts tend to blame everyone but themselves for any fiasco they are supposedly experts for. The $800 billion stimulus plan did not work? It was not because the political class experts were wrong, obviously $800 billion was not enough money, their theory and reputations cannot be wrong. Government financial experts did not see the Great Recession coming? Its not their fault or the fault of their expertise, its because they did not have the right tools and laws on hand and thus, we get the amorphous financial regulatory reform legislation. The government and political class gets more political power the more they screw up, an interesting phenomenon.
The other factor that probably makes government experts so wrong so many times is the fact that the political class likely cherry picks what experts they will listen too in order to keep themselves in office and to get their own legislative agendas passed. Since most politicians are lawyers, their expertise outside of law is probably minimal. Thus, they need the validation of experts to support their views, ignoring experts that run counter to their political needs.
In the private sector, we use our experts to correctly understand reality and make recommendations to deal with or optimize our experience with reality. In the world of the political class, reality has little to do with re-election if I can find the right experts to validate my biased perspective. In other words, private sector experts start the process by recognizing and describing reality and use their skills to deal with it. Politicians reverse the process, using their experts on the tail end to validate their personal view of reality which is usually centered around gathering power and staying in office.
Mr. Kling makes the point that life has gotten much more complicated over the past few decades. Health care is more complicated and personal, financial market savings and investment instruments and options have gotten more complicated and personal, communications technologies have gotten more complicated and personal, our television viewing options have gotten more complicated and personal, etc. Thus, to expect 500 or so people in Washington D.C. to have the expertise and experts to understand the myriad of personal decisions and options we all now face in life, is a recipe for disaster. These government experts rarely get anything right because of how complex life has become, witness their track record of failure above, and the price for these failures gets higher and higher every years as unemployment soars, national debt skyrockets, government and politicians get more and more powerful, and viable centralized solutions never materialize.
Which brings us full circle to "Love My Country, Loathe My Government." The basic tenet of the book was to dramatically reduce the size and intrusion of government, politicians and their experts in our complicated lives. We are best suited to be experts on our life. We do not need powerful but out of touch Washington experts telling us how to invest, how to take care of our health, how best to spend our tax dollars, etc. If our personal experts screw up, we can hold them accountable and move on, wiser for the process. When government experts screw up, the damage is likely to be widespread and devastating and accountability is non-existent.
If government experts constantly screw up, either by overestimating their ability to understand my life or by being overridden by political class considerations, at some point they can no longer be considered experts if they continually misunderstand reality. At that point, "political class experts" becomes the biggest and most destructive oxymoron in the country.
Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Also visit the following sites for freedom:
http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/
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