Hubris and Modesty
by Tom Donelson on August 21, 2011 at 10:20 AM
One does not have to love Rick Perry to know a success story, and let's face it, there are many within the Republican establishment who don’t love Rick Perry. The biggest criticism of Rick Perry is that the Texas economy boomed in spite of Rick Perry. There is a lesson to be learned here, namely, the success of the Texas boom is due to the Texas people and the wisdom of a leader instinctively understanding when to simply allow the market to work and stay out of the way.
Call it the Gurchan Das rule of democracy: Democracy works best when run by modest people. Mr. Das is an Indian writer who wrote a classic book, India Unleashed, on the need for free markets in India, and his observations were based on watching Indian bureaucrats using rules to stifle the entrepreneurship of Indians businessmen. For Das, the idea of a group of bureaucrats being able to run a modern economy of a billion people from New Delhi was not only absurd, but a lack of modesty on behalf of the government. Government is not all wise, and economic plans coming out of Washington for the past few years have borne that out.
The key to understanding Perry is that Perry's idea of government being limited and modest in scope. Just look at Perry’s own failures like when he tried to force Texas girls to be vaccinated for HPV, which showed overreach on a grand scale. However, Perry retreated for this simple reason, the rest of Texas refused to follow. It was a case of a governor who forsake modesty and paid a political price.
The success of Texas is not that of a grand government scheme to produce jobs, but a lack of a grand scheme to produce jobs. Over the past decades, Texas became a state that is no longer just dependent upon the energy sector but has expanded beyond that as companies flee high tax blue states to take up residence in the Longhorn state, and this has been followed by influx of workers looking for opportunities.
Perry, like any other politician, takes full credit for the Texas miracle, but the real miracle is that Texas politicians have reduced their interest in micromanaging their economy. (I won’t say that what Texas politicians and Perry have done is perfect, as there has been the occasional attempt to micromanage the economy through various plans, but there have been fewer than other states.)
This brings us to the national political scene. The reality is that politicians are limited when it comes to “producing jobs through jobs program”, but no politicians are going to run on the platform of federal government is limited in getting the private sector to produce jobs. When Michele Bachmann tells audiences, “Hey, I have a plan for $2 a gallon gas,” this is a politician exhibiting hubris not modesty. Bachmann can no more control the energy market than what Obama has already promise and failed. The market is made of billions of people working and making transactions on a daily basis and no politician is smart enough to manage a national economy of 300 million plus people involved in a global economy of 6 billion plus people.
Government can produce jobs in the sense that government programs pay people to do certain things, but one can’t leave out the fact that for every dollar government collects is a dollar not being recycled in the private sector needed for reinvestment. That is why government ability to create prosperity is limited since there is only so much money government can collect before multiplier effects see diminishing return. This does not mean government doesn’t have a role in our lives or the economy; only that there is a limit to what good government can do. A big government could or does result in reduced freedoms, not enhanced wealth. A restrained government protects the rights of individuals while allowing individuals enough freedom to produce wealth and pass it around.
Which brings us to the big lesson of Texas, modesty is the hallmark of successful government policy. When politicians realize their own limitations, then government will be successful. Texas is what happens when prudence takes precedence over arrogance.