- With today's talk of accountability, many are turning to the government for answers.
- But government is more often akin to Monty Python and the Holy Grail than the legendary King Arthur and the Knights of the Round Table.
- US history is riddled with periods of deregulation followed by economic boom, then stifling over-legislation and bust.
- Though we're nowhere near the Great Depression, we face heightened risk of a harsh or extreme regulatory backlash should sentiment continue far detached from reality.
There's an awful lot of talk about "accountability" right now. Energy is expensive, Financials continue to struggle, and decent people are losing their homes. Things seem bad and naturally, people feel like something should be done. The difficult question is who should do something? What should they do? How do we know what's done will be less harmful than doing nothing? Who decides?
The most popular answer these days (and most days) is the government. No matter how little politicians accomplish or how big they mess up, our faith in them is mysteriously unwavering. Call it the King Arthur effect. The greatest leader—a nation builder, a hero in the mist, hidden by powerful magicians—will emerge and solve the country's problems. We forget about the demonstrated benefits of democracy and forget that no King Arthur will ever be smarter, stronger or nobler than all of us together. And the unfortunate result is often more akin to Monty Python and the Holy Grail than Camelot. Despite billions in tax revenues, we get a low budget 1970s Arthurian farce that's entertaining if you've got the right sense of humor. (True story: We were watching C-SPAN last week, and Senate Majority Leader Reid taunted Minority Leader McConnell, "Your mother was a hamster and your father smelt of elderberries!")
Like the Old Man from Scene 24 or the French Taunter, challenges inevitably pop up to hinder our quest. US history is riddled with periods of deregulation followed by economic boom, then stifling over-legislation and bust. We can see it in the Roaring Twenties, the Crash of 1929, the Great Depression, the New Deal, and, following a post-war induced growth period, the 1970s. (Beyond hilarious British satire, the 1970s also gave us the Osmonds, Schlitz malt liquor on the rocks, sky-high inflation, recession, and one of history's longest and deepest bear markets.) And today's extended growth period follows a 1980s bout of deregulation.
Yet knowing the disastrous results of hyper legislation (Smoot-Hawley, Sarbanes-Oxley, anyone?), many eyes still return to Washington. But our government was designed to be like wrestling molasses—to promote lengthy debate and prevent autarchy—leaving most problems to society's gift for self-governance. It's typically a sign the government's working if the feds don't accomplish much in four years—and it's good for the country too.
As Friedrich Hayek wrote, ". . . in so far as [society] is controlled or directed, it is limited to the powers of the individual minds which control or direct it." In other words, no matter how great the minds making laws are (and often they're plenty smart, but no smarter than many everyday folks), they can't possibly know what's right for everybody or comprehend the endless complexity of today's economy. And if by luck or guts, they happen to get something worthwhile pushed through, society's swift pace renders it defunct in the blink of an eye. Many a good-intentioned but ultimately harmful law has been left languishing on the books for 25 or 50 years.
Though comparisons in the media abound, we don't think today remotely resembles the early days of the Great Depression. And though rhetoric is heated, political will has so far been and will likely continue to be weak. But if dour sentiment continues far detached from reality, the risk of harsh or extreme regulatory response increases—forgetting that such periods of overregulation have in the past yielded much pain. For a change, let's be our own King Arthurs. We don't need the government to do more for our continued prosperity. In fact, we'd be better off if they did less.