An Economy In A Spin

I’m an engineer, but when I was thinking about a career path I seriously considered aviation and thought that being a pilot sounded like something I could have some fun at. I read Flying Magazine and searched out articles about civil aviation. This I did in the periodical section of the library because the only thing “on line” at the time was our laundry. One thing I learned is that many aircraft have what they call an inherently stable design. What’s meant by that is that the aircraft “wants” to be in a straight and level attitude, and no matter how disoriented or out of control the pilot is, if they take a few simple steps the aircraft will return to straight and level flight, assuming sufficient altitude of course. What I learned in those days (even though I never flew) is that a pilot should always trust their instruments, and that if all else fails and you find yourself in a spin 1) Reduce power to idle. 2) Put ailerons in a neutral position. 3) Rudder full opposite the direction of spin, 4) Put the nose down. Of course this requires knowledge of the aircraft, a cool head, and faith in the procedure.

This concept is, or could be extremely helpful in today’s economic world (even though a grad student trying to teach me English Comp told me to avoid such clichés). A free market economy is much like an inherently stable airframe. It will, by itself, seek straight and level flight. It will seek a state, where each economic transaction, large and small, will benefit both parties. The economy can be controlled and directed to a degree, but it’s so complex and becoming more so every day that at the present time the government isn’t trying to direct the economy so much as trying overcome the negative effects of previous attempts at control.

The law of unintended consequences rules almost everything that happens with the economy these days. So many times legislation is written to correct and compensate for the negative effects of decades of favors done for cronies and interest groups. Then years later more legislation is required to repair the damage brought about by the unintended consequences of what came before. Good intentioned voters and politicians try to end poverty and wind up causing the disintegration of poor families and then they have to develop policies to combat the results of the policies they implemented while never admitting to the failure of the policies they promoted in the first place. They are doomed to a never ending and ever more expensive cycle of failure. The percentage of children living in poverty has barely changed in fifty years after having spent Trillions of Dollars trying to eliminate it. School test scores are unchanged after doubling the monies spent per pupil. Corporate taxes are higher and so companies move production and jobs off shore. The minimum wage is increased and those that need entry level jobs the most are increasingly shut out of the job market.

We are like that pilot in an aircraft hopelessly out of control and there is no hope that we will suddenly come into possession of the knowledge or skills that will allow us to save ourselves from certain ruin. We must trust in the inherent characteristics of the free market, the underlying principles, and follow the recovery procedure. 1) Reduce power to idle. We must stop trying to spend our way out of every perceived problem. 2) Ailerons to neutral. The government must stop trying to pick economic winners and creating economic losers. 3) Rudder FULL OPPOSITE the direction of the spin. We must recognize and admit that the economic policies of a half century have failed and eliminate the thousands of pages of rules and regulations that have sought to control the economy while giving benefit to this group or that, but instead have stifled economic growth, driven a third of the work force from the job market, and made all of our lives more expensive and complicated. 4) Put the nose down. We must be prepared to give up our reliance on the government to provide the things that we are perfectly able and used to provide for ourselves. We must learn to recognize the inability of the government to keep its arrogant promises and tell our elected representatives to just step away from the controls.

But that’s just what an average guy thinks