Presidents Can't Manage the Economy

Politicians who talk about managing the economy ignore the fact that, strictly speaking, there is no economy. There are only people producing, buying and selling goods and services. Keep that in mind, and one realizes that government action more often than not interferes with the productive activities that benefit everyone. When politicians propose regulations to fix some problem, they should ask if some earlier intervention created the problem and if the new regulations will make things worse. The answer to both questions is usually yes.

The economy is far too complex for any president — no matter how smart — to manage. How can politicians and bureaucrats possibly know what hundreds of millions of individuals know, want and aspire to? How can government employees fathom what trade-offs to make in a world of scarce resources?

They can't. That's why free people are more prosperous than unfree people.

Presidential candidates should promise to keep their hands off the economy.

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