While Washington Argues ... Adam Smith Solves Problems!
The current fiscal drama highlights the cultural obsession this country has with its government. The 24- 7 media blitz covering the pending debt ceiling deadline feeds an American mindset which impatiently looks to our government with disdain and fearful hope to solve what are perceived as the biggest challenges faced by our country. Since the results are seldom satisfactory, both sides of the political aisle are often in a perpetual state of chronic disappointment and utter astonishment at the seeming dysfunction exhibited by “leaders” which are supposed to guide us into the future. Moreover, in the wake of watching how the sausage is actually made in a democracy is a great deal of trepidation. Unfortunately, based on a mistaken belief all hope is lost if our leaders are lost, this often depresses economic animal spirits and directs investors toward inappropriate portfolio decisions.
Certainly, the U.S. government and its leaders play a critical role in American life, economic and otherwise. However, the widespread impression the precise actions or inaction of the U.S. government is pivotal in whether and how well economic problems facing this country are solved is exaggerated. Although government decisions are not irrelevant, their impact on the overall economy are typically soundly overshadowed by actions of the “invisible hand.”