The Scarlet Pimpernel, the Weather, and the Economy

I read 'The Scarlet Pimpernel' last week and came across the following passage near the beginning of the book:

"It do seem more like April than September, don't it?" continued Mr. Hempseed, dolefully, as a shower of raindrops fell with a sizzle upon the fire.

"Aye! that it do," assented the worthy host, "but then what can you 'xpect, Mr. 'Empseed, I says, with sich a government as we've got?"

"Mr. Hempseed shook his head with an infinity of wisdom, tempered by deeply-rooted mistrust of the British climate and the British government."

This seemed like such an appropriate passage to read just after the elections. It's such an obviously ridiculous correlation drawn here between government policy and the weather. It made me think of the correlation we often draw between government policy and the state of the economy. I have no doubt that bad policy can hamper prosperity and good policy can encourage it, but we tend to lay all the blame and/or praise at the feet of the ruling political party. The truth, I believe, is much more complicated.

Policy, if it does have an impact on the economy, may not make a visible impact right away. It might take years for some effects to be seen. That makes it really difficult to scientifically dissect the impact of individual policy decisions ... maybe impossible in some cases. That means that the mess of one era may have been created jointly by decisions made over the course of multiple Congresses and multiple Presidential administrations. Blaming or praising the current government for the current state of affairs is very short sighted.

I'm no economist and I would quickly get in over my head if I started arguing my viewpoints in too much detail, but in addition to that problem of latency, I also believe that our elected officials have much less influence over the economy than the unelected officials of the Federal Reserve, which, as I understand it, is neither 'Federal' nor associated with any type of 'Reserve'. But even those officials don't wield as much power as we'd like to think they do.

Our national market is made up of millions of individuals making individual choices every single day. That is far too complicated a system to be 'controlled' by such a small group within that system. We, as participants in the market, are the ones with the most power, though we're a terribly unorganized force. Failing to recognize our own power and placing the blame on someone else makes us feel good, but it also takes away our power to change anything.

I'm a big fan of the Austrian school of economics and though I don't think they have all the answers, I am convinced that they have the beginnings of the right formula for a perpetually healthy economy, though natural booms and busts will always be with us. The formula is based on freedom, but it must also include virtue, which I'm not going to define right now, but I might clarify that someday.

Having said that, I would prefer to see the government stop meddling in the economy and "leave us alone", as the French phrase "laissez-faire" implies, but even if they don't, we are the ones who have the true power over the economy. Let's do what we can to encourage government to do what we think is best for the economy, but having done that, let's then turn our attention to our own lives and do all in our power to improve our own situation and the situation of those around us.

And let's try to stop blaming the ruling government for everything that goes wrong, whether that be the economy ... or the weather.