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Opinion from a Libertarian ViewPoint

EconomicPolicyJournal.com: Council of Economic Advisers Goes Woke and Calls for Massive New Government Control and Spending

Posted by M. C. on May 14, 2021

Further, they fail to understand another crucial point that Hayek made. This one in Chapter 10 of his book The Road to Serfdom. In the chapter, Hayek makes clear that the planned society results in the worst getting on top.

When you create government power centers, be it for new technologies, family support, education or whatever, the most evil will do what it takes to get close to such power and twist the power for their own benefit.

This is the horrifying direction that the CEA is justifying in this Brief.

https://www.economicpolicyjournal.com/2021/05/council-of-economic-advisers-goes-woke.html

The Biden Administration Council of Economic Advisers has issued a Brief attempting to justify more government spending, a greater role for the government in the economy, mixed with woke positioning.

Some key snippets from the horrific paper (COUNCIL OF ECONOMIC ADVISERS ISSUE BRIEFMAY 2021):

The opening pargarapgh: 

For the past four decades, the view that lower taxes, less spending, and fewer regulations would generate stronger economic growth has exerted substantial influence on U.S. public policy. Over this period, the United States has underinvested in public goods such as infrastructure and innovation, and gains from growth have accrued disproportionately to the top of the income and wealth distribution. Long-standing racial, ethnic, and gender disparities persist. In addition, while historic progress has been made in expanding health insurance, more remains to be done to provide adequate protection against economic risk. Indicators of deprivation, such as child poverty, are too high, and declines in overall life expectancy in some years prior to the pandemic, accompanied by increased disparities, are cause for concern.

And the start of the call for more government involvement in the economy: 

The economic theory underlying President Biden’s American Jobs Plan and American Families Plan is different. These proposed policies reflect the empirical evidence that a strong economy depends on a solid foundation of public investment, and that investments in workers, families, and communities can pay off for decades to come…

In order to function and deliver strong and shared economic gains, markets need an engaged, effective public sector. From policies that spur innovation and facilitate labor supply to those that provide investments in children and protections against economic insecurity, the public sector has an important role to play in supporting the economy.

There is a call for government supported and managed technology development: 

Innovation—and the new technologies that result from it—drives growth, and the public
sector plays a pivotal role in that process…

Public support for research and development is essential to achieving an appropriate level of innovation…

There are also times when the public sector has to consider the composition of what is produced or how it is produced. 

 Then the Brief goes woke.

An economy where economic gains are not shared is one that is not delivering on its full promise to those who do the work of producing economic output…

Investments in children are a powerful force for equity…

Investing in children will thus not only deliver improved outcomes and faster growth, it will also advance equity by narrowing racial disparities and reducing child poverty.

The public sector plays a crucial role in ensuring that communities are not left behind…

New forms of protection against economic insecurity are necessary to ensure that
unavoidable risks do not become avoidable economic pain. Research finds that social
insurance programs not only directly reduce hardship and financial risk, they also moderate
economic downturns, improve health, and save lives. Investments in expanded social insurance would build on a long tradition of American social insurance programs, including unemployment insurance; Social Security; and Medicare, Medicaid, and the Affordable Care Act.

In short, the Brief from start to finish is justifying a move away from freedom and individual initiative and in the direction of the idea that the state must act as the director of economic activities and outcomes. It is far along the way to a vision that is fundamentally anti-American and in the direction of planned societies that have delivered such horrors as the National Socialist German Workers’ Party, the Soviet Union, and Mao’s China.

It is a Brief that shows naive thinking that Hayek warned about when he stated that “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

It appears that none of the Biden economists at the CEA understand any of this. They appear to truly believe they can design the economy.

Further, they fail to understand another crucial point that Hayek made. This one in Chapter 10 of his book The Road to Serfdom. In the chapter, Hayek makes clear that the planned society results in the worst getting on top.

When you create government power centers, be it for new technologies, family support, education or whatever, the most evil will do what it takes to get close to such power and twist the power for their own benefit.

This is the horrifying direction that the CEA is justifying in this Brief.

It is a recipe for a collapsing standard of living coupled with more state authoritarianism.   –RW

Be seeing you

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