Today's Detroit News has an editorial "There's no good reason for state to set up 401(k)s." Michigan's Governor Jennifer Granholm is proposing the state set up 401ks for small businesses. There are lots of people opposed to this idea of the state competing with private 401ks including me.
This paragraph though, I had to read twice: "[State Treasurer Jay] Rising also says setting up a 401(k) plan and hiring a firm to manage it 'can be pricey' for small companies. But the administration has also has (sic) said the state can do it 'for a nominal amount' of money."
What? Since when has Michigan (or any other state for that matter) done anything 'for a nominal amount' of money? I don't know of any state worker making only a nominal amount of money getting only a nominal amount of benifits so that I only have to pay a nominal amount of taxes. I know of used car salesmen who wouldn't try to sell me that.
But the question is: why is the state trying to assume the responsibility for providing 401(k)s in the first place? (aside from the fact that Michigan's economy is in the tank and all pols feel a profound need to "do something")
The answer can be found in the last paragraph of the editorial:
"Only the state can provide well-paved roads and a welcoming tax and regulatory structure. It doesn't always do so. Until it masters its basic duties, should it be taking on new ones?"
That's like saying "Until the state learns to violate some of our rights more efficiently, it shouldn't be allowed to violate more of them."
As long as our intellectuals-and that includes newspaper editorialists-insist that "providing well-paved (now there's a joke) roads and tax and regulatory structures" are "basic duties" of state govenment, there is no way to stop the state from including more services under the guise of "basic duties."
In a laissez-faire capitalist Michigan, the economy would not be in the tank because the government would not be allowed to interfere with the market. Back in the 80s Chrysler would have been allowed to fail. This would have made GM and Ford (and Delphi) stronger today. Compulsory unionism would not have existed so companies would have been able to adjust to globalization sooner and less painfully for sure.
But these are the unseen things. You can't see them if you confine your vision only to what is immediately infront of one's nose. Pragmatism is not practical.