Thus, no matter how deceptively simple and appealing command economy programs are, they are sure to trip up their operators, because the operators can’t possibly be smart enough to make them work.
Hayek’s insight into economics and regulation is often called “The Knowledge Problem,” and it is a very powerful notion. But recent events suggest that it’s not just the economy that regulators don’t understand well enough — it’s also their own regulations.
This became apparent when various large businesses responded to the enactment of Obamacare by taking accounting steps to reflect tax changes brought about by the new health care legislation. The additional costs created by Obamacare, conveniently enough, weren’t going to strike until later, after the November elections.
But both Generally Accepted Accounting Principles and Securities and Exchange Commission regulations require companies to account for these changes as soon as they learn about them. As the Atlantic’s Megan McArdle wrote:
“What AT&T, Caterpillar, et al did was appropriate. It’s earnings season, and they offered guidance about , um, their earnings.”So once Obamacare passed, massive corporate write-downs were inevitable.
Please go read the entire piece.
The government is too large to even keep track of what it is doing. Yet we are assured – over and over again – that this particular bit of legislation will take care of everything. Until the next bill is passed to deal with the last fiasco. This is the central lesson the statists cannot comprehend. Government cannot fix everything because government is essentially incompetent by its very nature.
Not only do they not know what they don’t know, they don’t care.
They don’t care that their big “victory” on health care will bankrupt the country and destroy jobs and wealth. They don’t care that their plans and schemes always – every, single time – backfire and bring about massive negative consequences.
On the plus side, they also don’t care to understand that this time they have angered the very people who can turn them out of office and start to turn this around. If enough people get motivated to stop them, then they can be stopped.
Get started, folks. Talk to your friends. Talk to your family. Get them thinking. Get them registered to vote.