Thomas Sowell begins his latest column with an idea that has long fascinated me:

When people learn that you are an economist, they often want you to predict which way the economy is going. There seem to be more than the usual number of calls for such predictions lately. But an economist should be more aware than others are of how hazardous such predictions can be.

One reason is that what happens in the economy is affected by what politicians do in Washington– and who can predict what politicians will do?

As Dr. Sowell explains in the remainder of his characteristically brilliant piece, the one thing politicians most certainly will not do is nothing, even if that is clearly the wisest course of action.

Think about the economic disruption caused by the presence of an aggressive, activist government in our markets.  It’s like a great white shark, prowling through a sea of much smaller corporate and individual fish.  It obeys none of the rules binding the other players in the market.  It can suck virtually unlimited funding from private entities… at least, until this suction causes the rest of the economy to implode.  This allows it to shrug off financial wounds that would kill any other fish in the sea, and makes it almost completely blind to the signals of pain that would cause private industries to change their behavior.

The government can rewrite the law to suit itself, or ignore laws it finds inconvenient.  It can rig the marketplace to punish competitors, as the Obama Administration has been doing with the health insurance industry.  It can shape media coverage to smooth over errors in judgment that would be public-relations disasters for any corporation.

As Sowell points out, these factors combine to make the State extremely unpredictable.  Would a company with President Obama’s record of abject failure dare to approach its investors for another $50 billion in funding to continue the same ineffective policies, under the same management?

How should private-sector fish deal with this massive predator cruising among them?  The very smallest fish might initially hope to avoid its notice, but there is simply no way to escape broad national mandates like ObamaCare, Card Check, or cap-and-trade legislation.  The best way to avoid the gaping jaws of the government shark is to stay agile and keep a low profile.  The last thing any small-business owner wants is to grow large enough to draw the direct attention of this Administration.  They can only hope political expedience doesn’t place their industry on the target list for taxation, regulation, or demonization.

For larger companies, invisibility is not an option.  The smart play is to become like remora fish, attaching themselves to the State and feeding on the scraps it leaves behind.  The flavor of socialism practiced by contemporary Democrats relies upon this behavior.  The objective is to bend the private sector into compliance with political ideology.  Only a modest percentage of the private sector can be directly nationalized, unless the government shark is ready to mutate into something even more huge and feral.  This leaves the statist hungry to take on a number of “partners” in the private sector.  It has trillions of tax dollars, plus even more valuable regulatory incentives, to purchase all the partners it needs.  Al Gore became a billionaire selling carbon credits, an entirely artificial industry created out of thin air by oppressive government regulation.  There are more billions where those came from.

Investment is not gambling.  It is a carefully reasoned attempt to predict the future, and profit from anticipated conditions.  When the government directly controls the economy, to the degree ours currently does, scientific prediction becomes extremely difficult.  Who knows what bailouts and injunctions might lie ahead?  Businessmen are reduced to reading tea leaves, like which industries the State is spending the most time slandering, or which states the most powerful Senators hail from.  They become eager to purchase influence, which politicians are equally eager to sell.  Big Business finds it very useful to direct the hungry shark’s attention toward its smaller adversaries.  If corruption is defined as the exchange of financial support for unequal treatment, all large governments are inherently corrupt.

For the remora economy, anticipating the needs and desires of consumers is all but futile.  The smart play is to anticipate the needs of the State, and the desires of its dominant ideology… then latch onto the bloated shark when it swims by, and hang on for dear life.  Businesses attached to the State always find ways to profit from the relationship… and eventually, they become dependent upon it, and actively resist attempts to restrain the government spending and regulation which has become integral to their business model.

When the great white shark dies, everything attached to it will die along with it.  That future is unthinkable, so the State insists no one should waste any time thinking about it.  It’s also less than twenty years away.

Cross-posted at Hot Air.

Doctor Zero: Year One now available from Amazon.com!

President Obama “unveiled” his new “stimulus” plan in Wisconsin today.  It was a lot like watching an alcoholic unveil his new plan to get sober by switching to lite beer:

We’re going to “fire up sluggish economic growth” by plowing another fifty billion deficit dollars into roads, rail, and airports?  It’s hard to believe even the American media would be lazy enough to write such a headline with a straight face.

Does anyone seriously think our economy is just waiting for another fifty billion dollars’ worth of roads to come roaring back to life?  I guess business owners have all sorts of property staked out for new factories and shops.  They’re just waiting for someone to build roads leading to them.  Does all of this Administration’s economic knowledge come from playing “Sim City” computer games?

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After the passage of his massive health-care plan, President Obama promised a “hard pivot” to dealing with our flagging economy.  Job creation was said to be his new “top priority.”  Politicians make a habit of declaring lots of top priorities.  Mark Knoller of CBS News recently put together an amusing list of thirteen items the President has declared to be his top priority.  The promise to put the economy first was repeated loudly and often.  It will still be ringing in the ears of voters when they clean Democrats out of Congress with an electoral leaf blower this autumn.

In reality, job creation and economic growth are nowhere to be found on this Administration’s list of priorities.  The “hard pivot” was actually the feeble ring of ruby slippers clicking together.

Anyone who seriously considered job creation imperative would, at a bare minimum, refrain from the wholesale destruction of industries.  Michelle Malkin gives us the bomb damage assessment from the Obama War on Jobs: dereliction of duty on border security, the offshore drilling moratorium, pulling onshore drilling leases, shutting down auto dealerships, and the burden of paying for health insurance “reform” which has become a sucking chest wound in the U.S. economy.  The offshore drilling industry will take decades to rebuild, as equipment begins to move permanently out of U.S. waters.  The Administration knew the ban it fought so hard to impose would kill 23,000 jobs.  Obviously the preservation of those jobs was not a “top priority.”

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Back in June, Vice President Joe Biden made one of the bizarre statements for which he has become famous, as reported by CBS News:

Vice President Joe Biden gave a stark assessment of the economy today, telling an audience of supporters, “there’s no possibility to restore 8 million jobs lost in the Great Recession.”

Appearing at a fundraiser with Sen. Russ Feingold (D-Wisc.) in Milwaukee, the vice president remarked that by the time he and President Obama took office in 2008, the gross domestic product had shrunk and hundreds of thousands of jobs had been lost.

“We inherited a godawful mess,” he said, adding there was “no way to regenerate $3 trillion that was lost. Not misplaced, lost.”

There’s no possibility those jobs will ever come back?  Really?  The American economy simply decided to wipe out eight million positions?  The real unemployment rate, counting long-term discouraged workers who have dropped out of the labor force entirely, is over 16%.  Some metrics place it closer to 21%.  Does anyone really believe that the free market, of its own accord, would choose to leave a fifth of the working population idle?

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Reuters columnist James Pethokoukis tells us the markets are preparing for a fantastically expensive “August Surprise” from President Obama:

Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion… The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses.

This vote-buying scheme would come on top of $400 billion in taxpayer dollars already pumped into Fannie and Freddie… just a few years after Democrats assured us there was “no crisis at Freddie Mac, and particularly Fannie Mae” (Maxine Waters) and the corporations had no “safety and soundness problems” (Barney Frank.)

Fannie and Freddie are among many black holes gobbling up tax money these days.  In the two years since Barack Obama took the bailout football from George W. Bush and ran it several trillion yards, the American economy has degenerated into a massive life support system for its most insolvent components.  Financial institutions, auto companies, and “stimulus” targets have been infused with hundreds of billions taken from taxpayers.  Each new, politically connected corporation declared “too big to fail” becomes a crushing burden on a nation too weary to hold them all up.

This “August Surprise,” presented to underwater mortgage holders by our children on behalf of the Democrat Party, detonates the current line of garbage from panicked liberals… who have been floating a new meme that rampant deficits are caused by insufficient tax revenue.  Spending will always be the problem, because spending is easy.

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How much is a new Chevy Volt electric car worth?

The sticker price is $41,000.  However, with federal subsidies, you could pay as little as $33,500.  Additional subsidies provided by the state of California could knock it down even lower, for residents of the Golden State.  So what’s the price?

$41,000, of course.  The subsidies just mean you don’t pay all of it.  The utterly bankrupt federal government takes money from other taxpayers, and uses it to discount your purchase.  Since California is teetering on the edge of total collapse, and may well require federal bailouts in the near future, taxpayers across the country could end up paying additional sums to support Volt purchases that happen to occur within the state of California.  These transfer payments are mixed into the thickening concrete surrounding the American economy, making it just a few inches deeper.

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