President Barack Obama offered not only candor about the problems this country faces, but a sense of hope and confidence about America’s ability to come back stronger and more prosperous than ever.
Whether the program outlined in Tuesday’s speech before Congress will do it or whether the country will recover more in spite of what government does rather than because of what government does is the question.
The issue can be illustrated by an early passage, where President Obama laid out some of the reasons for the financial crisis and recession that has shaken so many peoples’ confidence.
His speech told only part of the story when he said “short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter or the next election. … People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway.”
All true enough. But what about government mandates that pushed banks to make bad loans in the name of housing for everybody? What about the years of easy money from the Federal Reserve that played such a large role in inflating the housing bubble? Private greed and reckless investment certainly played a role in creating the financial crisis, but the policies and incentives that made reckless investments seem sensible — because they assumed government would not let the reckless pay the full price of their recklessness — were made in Washington. Any honest analysis must surely acknowledge this.
It is inconvenient to do so, however, if you are pushing a program based on the premise that aggressive government action is the key to a healthy economy.
Most of our history demonstrates that prosperity ensues when government plays its proper role of creating a consistent rule of law and enforcing it impartially, safeguarding private property and enforcing duly agreed-upon contracts. When government performs those essential functions the creativity and ambition of individual Americans is unleashed to seek out the most effective and innovative ways to improve our lives and the lives of others.
Does President Obama understand the most revolutionary economic development of recent times, the personal computer, came from geeks tinkering in garages, just as, for example, widespread use of electricity came from relentlessly ambitious genius, and the airplane came from a couple of brothers in a bicycle shop in Ohio? None of these developments were predicted or planned nor could have been predicted or planned. They came because free people were able to experiment and innovate and follow their own dreams, not the course laid down by a central planner.
We certainly hope the enormous spending in the stimulus package helps to end the recession. We hope this president can “end education programs that don’t work and end direct payments to large agribusinesses that don’t need them,” as every president in memory has promised and failed to do. We applaud the closing of Guantanamo and the unambiguous declaration that this country henceforth does not torture.
We wonder, however, whether he truly grasps that the genius of America lies not just in the spirit of its people but in their freedom to find their own way, independent of the vision of those who have the temporary mantle of political leadership.