Sunday, August 22, 2010

Government thinks we’re helpless, makes us so

Published in The Tennessean, Sunday, August 22, 2010

Government thinks we’re helpless, makes us so

By Richard J. Grant

Are we helpless? Apparently our government officials believe we are. They seem less and less able to imagine that we could ever do anything for ourselves.

It becomes a problem when they act on that belief, regularly rushing to our aid even when we don’t need it. There are few things that politicians won’t do to curry our favor and to make them seem indispensible to our lives. After years of repetition and progressive encroachment, it seems normal and to be expected. We increasingly prove them correct.

It no longer seems natural to buy a house without a government-sponsored agency to guarantee our mortgage. We now also expect some kind of home-buyer’s credit as an incentive. And if we still can’t make the payments, the government will find a way to help us shift that burden.

“Energy efficiency” and “green energy” sources are of such importance that we cannot be expected to pay for them ourselves. After all, they don’t pay for themselves. Without a subsidy, the payback period for solar panels would be longer than the life of the panels. Even with a subsidy, the net energy production of solar panels is negative over their life-cycle. But many companies exist on these subsidies.

Greenish technology makes us feel so good that now we are happy to have the government subsidize its application to cars. Why wait for it to become economically and ergonomically viable when we can feel good about ourselves now and let the government find someone to pay for it?

Employers are apparently quite scary. They come up with ideas that make other people productive, and this gives them an advantage in the marketplace. Not to worry: the government has long since passed labor laws and imposed mandates to ensure that employees remain expensive. The current reluctance of employers to hire has nothing to do with this, we are told, and can be counteracted with subsidies financed by the government’s superior ability to borrow.

Selective tax breaks encourage employers to provide medical insurance and payment plans. With all the state mandates, licensing restrictions, and potential regulatory liabilities, this tends to confuse the market and to bid up the costs of medical coverage. But don’t worry; eventually the government will centrally plan the medical system – and we know how well that works.

Through Medicare, the government is already protecting us from some of our medical-planning responsibilities and the hard work of innovation and finding private solutions to real problems. With the assurance that the government will take care of us, we will learn to tolerate the minor inconvenience of collectivized rationing and waiting lists. We can also find comfort in the hope that our grandchildren will be better prepared to handle the trillions of dollars of unfunded liabilities we leave them.

For the economy’s sake, the government urges us to spend money. To the extent that we obey, we are less able to provide financially for our retirement. But the government doesn’t expect us to be that prudent anyway.

Through the Social Security system, a welfare scheme ostensibly funded by dedicated payroll taxes, we can rest assured that the government will take care of us in our old age. We need not worry about how much more our savings might have grown had we been allowed to invest them in real, productive businesses instead of funneling them into current consumption. Thanks to the government deciding for us, we need never worry about what we might have achieved had we been left with all the fruits of our labor and the responsibility of managing them.

To help us find our assigned place in society, and to relieve us of the burden of education, the federal government is increasing its funding of schools and universities. Now we spend as much, or more, per student without the variety or results of private education.

Helplessness comes with practice, and practice makes perfect.

Richard J. Grant is a professor of finance and economics at Lipscomb University and a scholar at the Tennessee Center for Policy Research. His column appears on Sundays. E-mail:

Copyright © Richard J Grant 2007-2010