An interesting quote by the Wall Street Journal Blog on Professor Adam Posen, a Harvard PhD economist, who sits on the Bank of England’s Monetary Policy Committee, revealingly illustrates the mentality of government experts.
(bold emphasis mine)
Along the way, he adds a few new metaphors to the debate over central banking: “Fear of looking ineffective should not be a deterrent to doing the right thing, he said. “When facing a worsening situation, you work with the tools you have, whether you’re a central bank in the aftermath of a financial crisis, or someone stranded on the road with a car problem when night is falling. And you try to get help.”
First, the quote simply reveals what we have pointed out in many occasions—bureaucrats and their academic cohorts are NOT there simply to make things “work”. Rather, they need to be seen first, as having a hand in “doing something”, a form of signaling to get accepted by the public, regardless whether their actions put to risk the general welfare.
In addition, the quote also exposes how so-called experts are willing to gamble with public treasury. That’s because at the end of the day, these entities are not held accountable or subjected the consequences of their actions.
Third, the analogy about someone stranded on the road with a car problem and getting some help is blatantly misleading. The car problem is mostly about voluntary assistance or public service to some of the afflicted and not everybody else.
Central banking policies are about putting a gun on our head and forcibly demanding us to act in accordance to the whims of the politically unelected leaders. It affects everyone else albeit in different degrees.
This effectively differentiates government experts from that of the private sector.
As Professor Arnold Kling aptly writes in the Era of the Expert Failures,
The power of government experts is concentrated and unchecked (or at best checked very poorly), whereas the power of experts in the private sector is constrained by competition and checked by choice. Private organizations have to satisfy the needs of their constituents in order to survive. Ultimately, private experts have to respect the dignity of the individual, because the individual has the freedom to ignore the expert.
Lastly, the quote also reveals on the hubris or what Friedrich von Hayek would call as the ‘Fatal Conceit’ of those in the political echelons.
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
They who cannot foretell of where the markets are headed for, seem to be consumed by the belief that social problems can be solved with presumptive models.