Almost every social or governmental issue these days is a boxing match, fighters charging out from opposite corners punching, swinging for a knockout. Look at economic policy for example. John Maynard Keynes’s ideas, advocating intervention when demand falters, using tax and investment to correct economic conditions, are favored by one side. These are considered “liberal.” Milton Friedman’s Chicago School proposes tactics associated with “conservative” attitudes: controlling interest rates to regulate the money supply, sanctioning free trade, allowing markets at every level to self-regulate. Friedman learned to box in Ayn Rand’s Atlas Shrugged gym; Keynes took lessons from Upton Sinclair’s The Jungle, a very different Chicago school.
Both of these approaches are functional and both are faulty. Over-regulation of the money supply may have unintended consequences and foreign governments may manipulate domestic policies to keep their exports competitive. Federal interventions, like welfare, don’t always work at the outer reaches of a good idea; good intentions don’t guarantee efficient results. Analysis of the complexities and the choice of the proper remedy should be left to wise, unbiased practitioners, not stage actors competing for votes.
Value is a consequence of desire. Desire is regulated by human emotions. An optimistic outlook promotes positive activity, purchasing, investment, confidence in the future. Economic downturn is the result of negative emotion, pessimism, fear. The “Great Depression” and economic downturns generally have been caused by a contagious fear that things are going to get worse and thus, inevitably, they do. The value of a new home or a new t-shirt increases and diminishes with my desire to own it, which varies with my confidence or insecurity. Would I rather live in a new house or have that money in the bank? These days the omnipresent media constantly presents the boxing match of policy making with no neutral voice, each side predicting doom if they lose. It is like having two plumbers under your kitchen sink cursing, arguing about which wrench to use. Which one can fix it?
Neither Friedman nor Keynes was 100% right. Not all remedies are guaranteed and orthodoxy does not guarantee success. The the principal responsibility of a leader is to inspire confidence, to combat negative emotions in words and actions. This is the problem with modern democracy: electing leaders based on their popularity instead of their background, education, demonstrated wisdom and proven ability is like hiring a plumber because you like his truck.
Nick Hilton - Reflections 