Why Government Fails But Individuals Succeed

By John Stossel The title of my new book is No They Cant! Why Government Fails But Individuals Succeed. Its a response to the last presidential election and that Yes we can! hysteria. The idea that politicians fix our lives is a fatal conceit. Candidate Obama even said that electing him will bring us to the moment when the rise of the oceans began to slow and our planet began to heal! Was it Moses talking? Polls suggest Americans are dissatisfied with government; Rasmussen recently found only 8 of Americans say Congress is doing a good job. But in a crisis we instinctively turn to government. We say There ought to be a law! One example: after 9/11 we were scared. I was more scared than you because I live in New York City. I didnt flinch when Congress said We need to take over airline security. Now the old airport screeners had correctly followed the governments rules before the terrorists hijacked the planes. The FAA allowed those small knives they used. But Senator Tom Daschle said You cant professionalize if you dont federalize. Then the Senate voted 100 to 0 to create the TSA. Hows that working out for us? TSA: Thousands Standing Around Its possible that the TSA has prevented terrorism. We dont really know because so much is secret. But I do know that it was no government official but passengers who stopped the shoe bomber and underwear bomber. And we now know that the current TSA spends ten times what the previous screening system spent. Theres one big airport where the TSA is not in charge: San Francisco. The law allows an airport to opt out of TSA screening and return to competing private screeners. We interviewed passengers in San Francisco and they said things like Gee these screeners are friendly. Whats that about? And the lines here moved more quickly. But do the private screeners keep us safe? The TSA did its own undercover testing comparing screeners in San Francisco and Los Angeles. The result? San Francisco screeners found contraband 75 of the time compared to 25 for the Los Angeles screeners. So why would they be friendlier faster and better at finding contraband? Because they work for a private company and the private company knows that if it does well it may be hired by other airports and make more money. If it doesnt do well it may get fired. Nobody ever fires the government. Thats why Israel and most of Europe use private screenersgovernment supervision but private competing screeners. Why are San Franciscos private screeners better? Because the company innovates. They have contests where a screener can win $2000 if hes fastest at unpacking and repacking luggage or better at finding phony pipe bombs. Hes rewarded if hes more courteous to people. The screeners are proud of their success. They dont act like government employees. Bureaucrats Want Power So other airports get wind of this and say Hey we want to opt out too. The airport near Glacier National Park Montana is busy in summer and dead in winter. Of course its dead in winterpeople dont want to go to Montana then. But the TSA being government maintains the same level of screening all year long. So in summer there are long lines. In winter TSA stands for its initials: Thousands Standing Around. So the Montana airport manager wants to opt out. Its written into the law that airports may opt out. But they have to ask the TSA for permission! In fact more than a dozen airports told the TSA We want to opt out. What did the government do? They ignored the request for a year. Then a couple of months ago they sent all the airports a letter that says: you may not opt out we do not consider this advantageous to the federal government. Wouldnt McDonalds like to say that to Burger King? Why do they say no? Because the bureaucracy wants to preserve its power. Bureaucrats know theyll have less power if other airports opt out so they hold on tight. This is what government does. Yet central planning appeals to people. Theres this sense that the wise elites in Washington and state capitals ought to plan our lives. After all theyre specialists and many are very smart. I have trouble getting my brain around how you build a sewage treatment plant myself. Our instinct is to say Yeah let the planners plan. The Invisible Hand Works But the truth is: it never works well. Were programmed to like central planning because when were little kids mommy and daddy planned our life and kept us safe. Our ancestors for thousands of years lived in groups of a hundred or so people. Then you followed the tribal leader or you were in trouble. If you didnt harvest the fruit when the clan leader said you should you might have starved and not given birth to people who gave birth to all of us today. So were programmed to follow the experts. Its harder to imagine the alternative: the invisible hand. Its invisible after all. Friedrich Hayek called it spontaneous order. People following their own self-interest work things out on their own. In a country of 300 million people or a world of seven billion people the invisible hand is the only thing that works. But thats not intuitive. I structure No They Cant around this dichotomy between intuitionand what my reporting has taught me. Central planners say Okay Stossel capitalism works for some thingssimple things like computers cell phones movies musicbut when it comes to the important things whether we live or die or complicated things like education youve got to have government control because the customer doesnt know enough. Are you telling me youre going to have a free market in medicine? When youre having a heart attack and on the way to the hospital youre going to do research on which is the best hospital to treat your heart attack or what the prices are? What a joke! And when it comes to education a parent doesnt know what the curricula should be or who a good teacher is. How is she going to judge? Thats intuitive. Defenders of the free market often back off when they hear that. But the truth is that the free market is better at everything including complicated things. Claiming to Lead the Parade How about OSHA? Some of you know about it. Its the Occupational Safety and Health Administration. It made sense. Some greedy businessmen ran factories that were dangerous and workers got hurt and killed. So we need the experts in Washington make a rulebook. The rulebook is now thick; even the lawyers dont know whats in it but the government officials can point to a gradual decrease in workplace injuries and deaths in America and say Look how many lives weve saved since OSHA was created. The small picture chart below is impressive unless you go back to the time before OSHA and see that in the big picture OSHA didnt make any difference. Deaths were already dropping!----- WORKPLACE FATALITIES PER 100000 WORKERS: SMALL PICTURE & BIG PICTURE Why does this happen? Because in free societies things get better! We get smarter. We learn from the last accident and take steps to reduce the chance that it will happen again. As we get richer we care more about safety. Finally even the greediest factory owner cares if only because it costs him money to train workers to replace the ones that he kills. Politicians claim its they who make us safe but government is like someone who jumps in front of a parade and claims it leads the parade. War on Poverty: Who Won? Another example is the war on poverty. Lyndon Johnson promised to fix poverty with welfare. The poverty rate did drop sharply the first five years after welfare was created. But then as you know the progress stopped. I would argue that the poverty rate stopped dropping because welfare taught people to be dependent. Welfare advocates could still say Well at least in the first five years we got lots of people out of poverty. But in fact the poverty rate dropped even more sharply before welfare began. Americans were lifting themselves out of poverty on their own! Government stepped in and stopped the progress. This happens again and again and yet government grows. It keeps growing. On the next page is a graph of the growth of government since the beginning of the republic. The spikes are World War I and World War II. Notice that for most of the history of Americaand when we grew fastestgovernment was less than three percent of the economy. Today its about 40 percent (including state and local spending) and as you know we are on an unsustainable course. Im partly at faultI and my fellow baby boomersbecause rudely we refuse to die. And we want what modern medicine brings us. When FDR created Social Security most people didnt even reach the age of 65. Now the American life span is about 78. Theres just no way we can tax young people enough to pay for what the politicians have promised us. And yet they keep spending more. Thomas Jefferson said it is the natural progress of things for government to grow and liberty to yield. And thats whats been happening. Someone Organize Those Skaters How do we convince people that central planning fails and that more of it will bankrupt us? The alternative the spontaneous order is not intuitive. Think about a skating rink. What if you had never heard of a skating rink and I told you Im going to make money offering people recreation. Im going to have a field of ice. People will strap sharp blades to their feet and zip around at high speeds. Young and old skilled and unskilled. My only rule is that everyone must skate counter-clockwise. You would say No! We need rules skating cops stop lights someone saying turn left turn right. Its not intuitive that a skating rink could work. But it does. The spontaneous order works much better than governments central planning. But we dont notice that. We take free markets for granted. We take it for granted that we can go to a foreign country and stick a piece of plastic in the wall and cash will come out. And we can give that same piece of plastic to a total stranger someone who doesnt even speak our language and hell rent you a car for a week. When you get home to Colorado Visa® or MasterCard® will have the accounting correct to the penny. If they dont youll get upset and complain. But government cant even count votes accurately! And now the advocates of big government tell us that government must run health care? Give me a break! Government fails but individuals succeed.