Friday, June 17, 2011

Maybe Obama is slowing the power grab of his czars & Hayek

Steven Hayward at Powerline sees evidence that Obama is slowing his many czars from their grabbing power and controlling our lives. It appears they are slowing on...

- Boiler regs that deliver little if any health benefits...
- Implementing monstrous Dodd-Frank financial regulations... now delayed

[Powerline] ... Quite aside from the political pressure being brought against the Obama Administration for the job-killing effects of overregulation, it is likely that the Obamanauts are running up against the basic problem that regulation shares the same epistemological or cognitive defects of socialist central planning. In other words, at some point the regulatory state cannot be made to work for the same reasons socialism cannot be made to work: the planners/regulators simply cannot assimilate enough information and make correct resource allocation decisions. The same problem is going to affect--is already affecting--the implementation of Obamacare; that's why so many waivers are having to be granted. 
Hayek called this the "fatal conceit" of our time, and was best explained in his classic 1945 essay in the American Economic Review, "The Use of Knowledge in Society."It's worth reading this short classic in its entirety (I assign it to students as the best short statement of why the administrative state cannot be made to work), but here is a brief excerpt that conveys the argument well:
 [Hayek] The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources--if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

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