No, not miracle workers

One key takeaway we should all come away with from the recent recession is that our political leaders are anything but infallible.  It is all too easy to believe that those in positions of government power have some insight or wisdom not possessed by the average everyday person.  While I will grant there are some highly intelligent people working in government they are just as prone to error as anyone else, it just so happens their errors impact a far greater number of people.

There are many, many great quotes leading up to the bursting of the housing bubble.  The passage below comes from the Washington Post in October of 2005.

"U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households."

"House prices are unlikely to continue rising at current rates," said Bernanke, who served on the Fed board from 2002 until June. However, he added, "a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year."

So if government leaders are no more adept than other "experts" at predicting the future, and in many cases much less so, why are there so many of them?  If those in charge were incapable of seeing a huge financial collapse coming why should they be in charge of implementing legislation to "fix capitalism"?  Does capitalism really need fixing or should we turn the finger to the government who told us they had everything under control right before economic disaster struck?

I say we get rid of government influence altogether and let the market decides who wins and who looses.  When turbulent times come some firms make it and others don't - replaced by better companies more adept at fulfilling consumer desires.  Ultimately this is a recipe for long term growth and success.