Monday, August 4, 2014

It's okay to be the party of no

There's an old saying that "it is better to do nothing than to do something stupid and unproven.  A government that heeds this advice would be far more likely to be successful than one that responds to all the whims and wishes of modern society.

Too many times we hear people see a problem and say, "We have to do something!"  It's good to search for solutions, but it's not good when these solutions are based on emotion as opposed to hard core facts.

Most U.S. Presidents before Woodrow Wilson had a Laissez-faire, or hands-off approach to government.  They basically stood on the sidelines and acted only when necessary.  Yet that all changed with Woodrow Wilson.

In fact, I believe it was Grover Cleveland (correct me if it was a different president) who was presented with a bill by Congress that would give increase taxes and donate $10,000 to states ravaged by natural disasters.  He vetoed the bill saying that the people are more effective at solving such problems than the government.  He was right. Since they weren't taxed, private people donated over $1 million to the cause.

During the 1920s the economy soared in an environment whereby the federal government basically cut taxes, cut regulations, and then just sat on the sidelines. That decade saw the greatest economic boom of all time, resulting in basically no unemployment.

During the 1920s taxes and regulations were scaled back, and that decade saw that largest rise in charitable givings in the history of this great nation.  So even while our nation is more charitable than any other nation in history, imagine if our leaders had more of a Laissez-faire approach to government.

Then we have examples of the opposite happening.  FDR raised taxes and regulations to the point that the great depression lasted ten years, while most recessions and depressions prior to the great depression were all short lived. They were short lived because legislatures and the president trusted the American people to turn things around.

The same thing happened during the last year of George W. Bush's term, and the entire Obama term, whereby the government overreacted to a recession and ended up making matters worse.  While our latest recession started in 2008, there is still no evidence that it is improving.

So, bottom line, Laissez-faire governments work best.