10. October 2013
Usually, I have the pleasure of using this blog to report on trends in the economic and market data that affect moldmakers. But since the government shutdown last week there has been very little data upon which to comment. As an economist and an owner of a small business, I rely on government data. And I am not the only one. Manufacturers, owners of construction companies, bankers, and farmers also rely on government data to help them make their decisions. Even the Federal Reserve Board relies on government data in its efforts to foster economic prosperity. But as of right now, the Fed and all of the rest of us are flying blind.
Anybody who reads this blog knows that I am no proponent of big government. I have been an ardent supporter of the Libertarian Party as long as I have been old enough to vote. I do not like Obamacare, and I am certain that if given the chance, it will fail on its own. I believe the same is true for Medicare and Social Security. The most likely outcome for these entitlement programs is that they will collapse under their own weight.
I do believe that industry statistics are an inherently governmental function. Like I said, all of us need this information, but many types of data cannot be reliably supplied through the private sector. Companies are in business to make a profit, and they would only be willing to supply market information if it provided a direct benefit and competitive advantage to themselves. Good data promotes the general welfare, and therefore it cannot be left up to any one company. So there are a few useful things that the government needs to supply.
The uncertainty in the marketplace that this political brinksmanship is causing is far too great a burden to put on the economy. I am not sure what will happen if we stay on the present course, but I do not trust politicians to know better than I do how to promote economic prosperity. Nobody in business trusts that the members of Congress who are orchestrating this shutdown actually know what they are doing. The economy is in need of repair, but they are not the ones who know how to fix it.
The good news is that there are a few members of Congress who can still render some intelligent solutions. Tax reform is an area that is in dire need of attention, and there are rumors that Congress may address this issue as part of the plan to re-open the government. Shutting everything down is a ridiculous way to get to tax reform, but at this point I will take just about anything to get past this debacle.