Monday, August 22, 2011

The Invisible Hand of Adam Smith

The Invisible Hand is really an amazing thing. It describes the self-regulating nature of the marketplace. Somehow, as if by magic, self interest works to produce stable and benevolent outcomes.

We get into trouble when we try to work against the Invisible Hand. The Hand said we had the right number of housing weatherizers in Seattle already. But the president's Hubris Brigade said it knew better:

Seattle had won a $20 million federal grant in 2010 to weatherize homes. The goals of the program were to create 2,000 jobs and retrofit 2,000 homes, according to the Seattle P-I.

“But more than a year later, Seattle’s numbers are lackluster. As of last week, only three homes had been retrofitted and just 14 new jobs have emerged from the program,” Seattle P-I wrote. “Many of the jobs are administrative, and not the entry-level pathways once dreamed for low-income workers. Some people wonder if the original goals are now achievable.”

Seattle isn’t alone. The Heritage Foundation noted in a blog post as Obama toured a battery plant in Holland, Mich. that another Michigan business touted by the administration for its “green jobs” no longer exists.

See, if there was a problem with the weatherization of homes in Seattle, someone would have profited by setting the situation straight. Without government intervention. Without grants. Someone like me would have noticed the problem, equipped a truck to do the job, and profited by making the situation better.

Notice I said "equipped a truck", not, "thrown the caulk-gun into the recumbent bike rack, along with insulation, weather-stripping, advertising fliers, and a dog named Toke, and set out to connect with home owners." The Invisible Hand even dictates the method by which the marketplace's business gets done. The usual way workmen go about their business is the profitable way; if it wasn't, they would abandon those ways and try new ones.

This administration thinks it knows better than the marketplace. It's wrong. It thinks high speed rail would be cool, but if we need high speed rail, the marketplace will notice. If we pump borrowed money into a project that the marketplace tells us we don't need, we'll regret it. Like the failed battery factory, the money sucking solar farm, the eagle chopping wind turbines.

We did yes we can. We did it to death. We need: yes we did, we're sorry, now we're done.