Business Basics

Arnold Kling offers a very short, amusing, and insightful view of what happened to the economy and the government’s response. How true, how funny.

There are larger issues here. All businesses spend money now in order to make money in the future. Sometimes they miscalculate. Sometimes they miscalculate due to sheer foolishness, but more often the assumptions behind their calculation change: new technologies arise, public tastes change, competitors do something clever, or governments change the rules. All of these things happen all of the time, making business (and the jobs produced by business) a risky proposition. Perfectly valid business plans can be undone by events.

We don’t want to impede technological improvement or new business ideas that benefit us. We can’t do much about public taste. We can, however, realize that every change in governance harms some business and some jobs. The change may be well intentioned, even beneficial for almost everyone. Nevertheless, some are always harmed. This is why “business conservatives” prefer government to proceed slowly and cautiously. This is why there is so much concern about the message coming from Team Obama: sweeping changes are being proposed. The impact of change is being hotly debated, but one thing is certain: any change damages someone and a bad change can damage lots of people.

We are all suffering through a government induced train wreck. Maybe we should proceed with caution and at least delay the next one.


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