Is our economy a machine, like an automobile, a train, or a power plant?

One constantly hears phrases such as, the economy is overheating, or needs to cool off,

or could use some stimulus.

These aren't harmless metaphors.

They epitomize how economists have taught us to see an economy, as something that can

be manipulated, guided or driven, and guess who does the driving?

The government.

The government is supposed to make sure that the economy hums along at an even speed,

going neither too fast, nor too slow.

But the economy is not a machine.

It is made up of people, and no one can control what billions of them are going to do.

What gets overlooked, underplate, or simply ignored, is the extraordinary churn in the activities

of a free market.

New businesses open, while others close, constantly.

In the US during normal times, a half a million or more jobs are created each week, while

another half a million are cut.

Entrepreneurs continually roll out new products and services, most of which flop.

But those that succeed can greatly improve our quality of life.

What government can and should do is to positively influence the environment in which this

hum of activity takes place through sensible taxation, monetary policy, government spending,

and regulation.

In almost all instances, the best prescription for economic health is less is more.

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