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A government with moral and legal authority promulgates written rules and universally, impartially and uniformly enforces the rules, which provides a stable and predictable legal order on which to base economic and personal decisions. The law prevails, not the proclamation or arbitrary decision of a ruler, government bureaucrat, the enforcer (e.g., policeman) or judge.
For the last few years, the federal government has intentionally not provided a stable and predictable legal order. Resultantly, America has a stagnate economy and crushing unemployment. Ideologically motivated legislation and decrees - ObamaCare, Dodd-Frank, monetary manipulations and regulatory uncertainty have created enormous insecurity within our financial systems. Insecure Americans are timid to buy, and businesses are disposed to conserve and cut back. John Taylor, an economist at the Hoover Institute, explains in the Wall street Journal:
America's economic future is increasingly uncertain. In my view, unpredictable economic policy—massive fiscal "stimulus" and ballooning debt, the Federal Reserve's quantitative easing with multiyear near-zero interest rates, and regulatory uncertainty due to ObamaCare and the Dodd-Frank financial reforms—is the main cause of persistent high unemployment and our feeble recovery from the recession
Taylor implores the federal government to provide predictable fiscal, monetary and regulatory policies. Referencing Friedrich Hayek, the great Austrian economist and Nobel Laureate, Taylor calls for adherence to the Rule of Law and a stable and predictable legal order. Taylor quotes the following from Hayek’s Road to Serfdom:
"Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one's individual affairs on the basis of this knowledge."
Presently, the federal government is harmfully increasing our uncertainty. ObamaCare and Dodd-Frank continue to have hundreds of rules being written by bureaucrats, the Federal Reserve continuously manipulates the monetary system, and America’s tax policy will radically be altered by the end of 2012. Hence, every American is cautious about their spending and every business continues to conserve and save. Taylor comments on the harmful actions of the federal government:
… the regulatory unpredictability associated with ObamaCare and Dodd-Frank, which includes hundreds of rules still waiting to be written, and the unprecedented quantitative easing through which the Federal Reserve bought 77% of new federal debt in 2011.
The U.S. tax code has become particularly unpredictable. The number of provisions expiring has skyrocketed to 133 in 2010-12 from 11 in 2000-02. And now the epitome of unpredictable policy is upon us in the form of a self-inflicted "fiscal cliff" where virtually the entire tax code will be up for grabs by the end of this year.
Remember, ObamaCare, Dodd-Frank, quantitative easing, and the fiscal cliff are intentionally legislated imbroglios all caused by elected officials and their complicit bureaucrats. Hayek foresaw that government officials – presidents, members of congress, and bureaucrats – tend to ride roughshod over the Rule of Law. Taylor comments on Hayek’s observations:
Hayek issued a warning. In a chapter in "The Road to Serfdom" called "Why the Worst Get on Top," he argued that there is a bias against individuals in government who firmly believe in rules-based policy. People who have the ambition to get to the top frequently have a bias toward discretionary interventionism, whether motivated by the desire to capture regulatory agencies on behalf of clients, advance the interests of cronies or indeed simply to position themselves for further career advancement later on.
Okay, two exceptional economists – Hayek and Taylor – know the value of the Rule of Law and the necessity of a stable and predictable legal order. They also know that the predilections of most governing elites are to disregard the Rule of Law. This begs the question, how do We the People make the governing elites comply?
The only recourse in a governing system elected by the citizens is to educate the voting population on the Rule of Law, particularly the absolute necessity of a stable and predictable legal order. Remember Hayek’s emphasis on predictability:
“… this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one's individual affairs on the basis of this knowledge."
Fortunately, Americans are searching for better governance. The prime example is the Tea Party Rebellion - a spontaneous and a fervent quest for good governance. The Rebellion knows the political elites will not voluntarily self-correct their processes and policies. Thus, the Tea Party Budget was produced by thousands of Americans. The Budget reduces the debt by nearly $10tillion in 10 years and reorganizes duties and responsibilities of federal agencies – absolutely essential. As a corollary to the Budget, the Tea Party Rebellion must educate their associates on the Rule of Law. Additionally, We the People must reach out to all Americans on the absolutely necessity of a stable and predictable legal order, stopping the arbitrary proclamations of the power elites. As usual, only We the People will reign in the harmful and erratic policies of the America’s ruling elites.