Wednesday, January 21, 2009

The day of Obama's inaugural: an appropriate warning

It came today from Anne Applebaum, in her column in the Washington Post, concerning Obama's plans for the economy:

" aspect in particular of the new administration's various "bailout" plans worries me: the assumption, which seems to lie behind such plans, that people make better decisions when they are handling public money than they do when they are handling their own money. Ample evidence, from many societies over many years, proves the opposite: Indeed, people entrusted with public money are overwhelmingly inclined to waste, steal or misuse it. After the initial failure of the federal government during Hurricane Katrina, for example, government money poured into New Orleans in the weeks and months that followed. The result: large-scale fraud, massive dissatisfaction and mobile homes so badly built that they could not be used. Yet many good things also happened in New Orleans after Hurricane Katrina. Volunteers of all kinds flocked to the city; local self-help organizations sprang up. This isn't to say there was no role for government there but that government worked best by supporting citizens' initiatives, not by replacing them. My greatest fear, on this Inauguration Day, is not that the plane's engines will fail and that the economy will tank: That has happened already. My greatest fear is that in trying to repair the economy, the new administration will waste time and money in the mistaken belief that government-funded, centrally planned infrastructure projects will somehow use money more effectively than private or locally inspired equivalents. My second-greatest fear is that multiple company "bailouts" will ultimately result in fewer jobs, and more wasted resources, than the regeneration that could follow a string of intelligently managed bankruptcies."

Yes, indeed--and the kind of waste and misuse of which Applebaum speaks occurred often during, for example, FDR's New Deal. The Works Progress Administration, which spent tons of money during those years, was often sarcastically called by its critics the "We Piss it Away" agency. Let's not forget that.