There are two words that really separate us hard-core libertarians from small-government Republicans and civil-liberties-focused Democrats: Chaos and Anarchy. Libertarians love chaos and anarchy, while most Americans still cringe from these words. For most folks, chaos is some Road Warrior-style dystopia and anarchy is Molotov cocktails sailing into passing cars.
But chaos and anarchy are in fact the hallmarks of a free society. They imply a bottom-up society where the shape and pattern of everything is driven by the sum of individual decisions, each decision made with that person's own optimization equation of his or her best interests, constrained only by the requirement they interact with other people without use of force or fraud. Our wealth, our technology, our modern economy are all born out of this chaos.
I have heard it said that capitalism is not a system, it is the anti-system. This is the true beauty of capitalism -- it is the only way for human beings to interact with each other without compulsion. Every other approach to organizing society involves some group of people using physical force to coerce other people.
This does not mean that every individual decision made, every investment choice, or every business model in a free society is mistake-free. Society and the economy are in fact riddled with mistakes. The HAVE to be, when one considers that the shape of this country is the sum of literally billions of individual decisions, small and large, made every day. The key, however, is that the outcomes are generally robust to mistakes, even large ones. Business people, for example, who make large mistakes see their business fail and their capital disappear and their assets repurchased in bankruptcy by other business people who may well make better, smarter use of them. Costly mistakes only persist when they are enshrined by law and enforced by government, and thereby protected from the forces that tend to act to correct them.
But despite all we owe to our capitalist system that fundamentally strives on anarchy, we attend schools run by large authoritarian institutions, like the Catholic Church or the US Government, which train us from an early age to fear chaos. This is not surprising, because the opposite of anarchy is control, regimentation, and top-down planning, all the things that authoritarian institutions strive to have us meekly accept. Large investments in public education in Western countries have always been in times of rapid expansions of state power and control. This was true in France in the early 19th century and Germany in the early 20th. It is even true in the US. If you doubt this, and want to claim that public education is all humanitarian, then why does the state make it so hard to opt out? The ultimate argument of every opponent of school choice is always some gauzy notion that public schools create a "shared experience," which sounds a lot like indoctrination to me.
The current administration is dominated by technocratic planners. For them, any process that is not being controlled top-down by "smart" people like themselves is by definition a failure. When I say that the current administration is reminiscent of Mussolini-style fascists, I am not implying that folks are going to be rounded up soon and sent to camps. I mean that the animating assumptions -- that any process controlled top down is more efficient than one that is allowed to operate bottom-up and chaotically -- are similar. FDR, for example, and much of the American intelligentsia were driven by very similar assumptions, and the National Industrial Recovery Act (fortunately struck down by a non-packed Supreme Court) was pretty directly modeled on Mussolini's economic planning system.
Examples? Well, the GM/Chrysler situation is a great one. One can easily paint a story that Obama's work to avert bankruptcy at these companies is just a crass political handout to powerful unions who supported him. But, just as easily, one can portray these efforts as a man who is uncomfortable letting the fate of a large sector of the economy play out beyond his control. Obama killed school choice in Washington DC despite fairly strong evidence of its success, because, again, everyone being educated in his or her own way just cedes too much control.
Another good example is this one, from the Anti-planner:
Ron Utt, the Antiplanner's faithful ally, has uncovered the first steps of President Obama's plan to force smart growth on those parts of the country that managed to escape the housing bubble. The departments of Transportation and Housing & Urban Development have signed a joint agreement to impose smart growth on the entire nation.
Under the agreement, the departments will "have every major metropolitan area in the country conduct integrated housing, transportation, and land use planning and investment in the next four years." Of course, nearly all of the metropolitan areas that already did such integrated planning suffered housing bubbles, while most of those that did not did not have bubbles. The effect of Obama's plan will be to make the next housing bubble much worse than the one that caused the current financial crisis.
Obama first hinted about this plan in a town hall meeting in February. "The days where we're just building sprawl forever, those days are over," he told a group in Fort Myers, Florida. "I think that Republicans, Democrats, everybody recognizes that that's not a smart way to desig, n communities." Not everybody.
As a note on city planning, I will not claim a direct causality, because I am the first one to warn of the danger between directly correlating two variables in a complex system, but check out this map of job losses in the recession, noting the situation in Houston as the least planned city in the country.