Econ. Bottom up or Top Down

Top down vs. bottom up-

Many economists today teach that Keynesian (top down) economics has failed. This is also the learning that I was lead to understand in my MBA economics classes, so for this writing we are going to assume that this is true.

This leads to the question- if top-down economics has failed then why do we continue to see government intervention, stimulus packages, increased regulations, and favorite industry subsidies? If all these actions have negative impact on the economy, then what is the motivation behind our government's actions? Some possible answers-

Our leaders-

1) are simply incompetent.

2) don't believe what the data is telling them.

3) believe they can plan and spend your money better than you can.

4) are power hungry, seek to control the lives of others, and see themselves as a ruling class who are above the "masses."

Sadly for many of our leaders all four of these exist to some extent or another. You don't have to look very far to see the evidence of incompetence- when a high ranking official calls extending unemployment benefits one of the best job creation stimulus methods not much more needs to be said.

What about those who don't believe what the data is telling them? Many fall into this trap republicans and democrats. Before he left office President Bush started with the first stimulus and started pushing for bailouts of the auto industry. President Obama came into office to fire off a huge 2nd stimulus and bailouts of the auto and financial industries. This was followed by a jobs bill and more. Surely at least one of these presidents saw economic data that showed that this kind of market intervention is ineffective at best and destructive at worst, but clearly they did not believe it. You can get away with ignorance by claiming "just think how bad it would have been if we would not have acted." Regardless of such silly claims, just consider where our economy now stands. A rational mind will say that we probably did no good with these measures and certainly made things worse for the long run.

The "do gooders" as Reagan called them believe, regardless of what reality and data says, that if they are in charge of spending, job creation and all economic planning that they can create a utopian society. It doesn't matter that no one has ever succeeded in creating such a utopia with these methods, because surely it has not succeeded because "they" were not the ones to implement the scheme. Not believing actual life data makes this group no better than the ignorant and possibly much more dangerous.

Finally the power hungry- Many of us average folks have a hard time believing that we have any leaders who view themselves as being in the ruling class and above the "masses" seeking for power over others, but let's not fall for the same fail mode of not believing the data. When our leader says "with my plan [energy] rates will necessarily skyrocket" how can this possibly be justified as a reasonable policy. We could review the "reasons" stated by leaders and in the media why we would want such policies, but let's not... Instead consider the effects of these kinds of policies. What is the best way to control the behavior of all the "masses" in a country of people who love liberty? Make the costs of living high enough that the lower and middle classes can no longer afford to travel and move about the country. Add to those costs government controlling more and more areas of our life (health-care) and "their" power over the "masses" grows quickly. Before I get accused of being crazy and seeing conspiracies where none exist, can you really believe that we have wonderful benevolent leaders and government who exist solely to do what is best for every one of us? Who is the crazy one? Washington knew what he was talking about when he said-

"Government is not reason, it is not eloquence, it is force; like fire, it is a dangerous servant and a fearful master."

"Plans by the many not by the few" is the fundamental aspect of economic liberty and freedom. Not only do we loose that liberty with Keynesian type policies it is also destructive to the economic health of the country.