With the public weary of bank bailouts, stimulus packages, and the federal loan program that produced the Solyndra scandal, Democrats still believe that Congress should play a major role in shaping the economy — with the help of expert planners, of course.
Senate Majority Whip Dick Durbin, D-Ill., acknowledged as much when he accused congressional Republicans of “simply standing back while trying to design the bumper sticker for the 2012 election instead of designing the economy to put Americans back to work.” Durbin said this during an interview with the Chicago Tribune.
Durbin’s suggestion that Congress should “design the economy” gets to the heart of a pragmatic disagreement between Republicans and Democrats on matters of economic policy. Nobel prize-winning economist Friedrich Hayek explained that economic central planners do a much worse job of “designing the economy” than the decentralized “planners” of the free market — small businessman and consumers, for instance — who make personal economic decisions based on much more complete information. Central planners, in contrast, lack the knowledge to make good decisions for everyone.
Durbin should have learned Hayek’s lesson when his amendment to the Dodd-Frank Bill, ostensibly to protect consumers from big banks, resulted in a new debit card fee for consumers to pay. And the miscalculations don’t stop with Durbin. Vice President Joe Biden, after proposing a bumper sticker slogan for the 2012 elections (don’t tell Durbin), blamed miscalculations by expert advisers for the failure of the stimulus to keep unemployment under 8 percent. He didn’t explain why Americans should trust advisers from the same Administration to commit still more taxpayer money to stimulus spending.
White House Press Secretary Jay Carney has also taken this line of attack in recent days by disparaging Republican economic proposals for not creating jobs in the short-term, whatever their long-term merit. He corroborates that charge by noting that Republicans opposed federal spending to prevent teacher layoffs. (Congressional Republicans opposed the spending because of concerns about deficit spending and because the last two bailouts for teachers jobs under Obama failed to ensure long-term job security.)
Durbin implicitly paralleled Carney’s position, saying that “we’ve got to wrestle with this recession for the next year [through stimulus spending] but then get serious about deficit reduction over the next ten years.” He also grossly misrepresented the position of congressional Republicans, whom he accused of refusing to “come up with an alternative [to Obama’s economic agenda and] put something on the table.” With that, Durbin acted as if House Republicans hadn’t passed 16 economic bills, including “The Path to Prosperity” advocated by Rep. Paul Ryan, R-Wis., that the Senate Democrats have killed. Even Carney acknowledges the existence of these long-term proposals, although he disagrees with them as policy items.
Congressional Republicans don’t want to spend tax dollars on a rehash of economic policies that have already failed so badly that even Durbin admitted that if the 2012 election “is a referendum [on Obama and the economy], then we’re in trouble because the economy is not good.”
