Tuesday, July 7, 2009

A National Straitjacket

T.Boone Pickens was recently on CNBC calling for a national energy plan. Without such a plan, he says that in ten years the United States will be importing 75% of its energy, and that oil will be $300 a barrel.

Such precision in long range forecasting is admirable, but it is not credible.

We've heard this kind of thing before. Remember Uncle Joe's Five Year Plans? Or the Great Helmsman's Great Leap Forward? Now we have the paradox of an American businessman promoting the same kind of national-scale economic planning that worked so well in the USSR and Mao's Red China.

With friends like this, who needs enemies?

There is no reason to believe that T. Boone Pickens is any better at telling the future than the rest of us. Ten years ago, the number one planning issue was Y2K. It turned out to be a non-event.

In 1999, the most important things to come were apparently unimaginable, even to a visionary like Mr. Pickens: a major terrorist attack in New York, the near death of the American airline industry, a war in Afghanistan, another war in Iraq, record low interest rates, the drowning of New Orleans, a housing bubble, a stock market bubble, the worst recession since the Great Depression, a government takeover of GM, Wachovia at 76 cents per share, two bankrupt Wall Street firms, and a government rescue and significant ownership of Citigroup.

Alas, the world we live in is so messy and filled with so many surprises that it makes any national ten year plan a joke. Such a plan leaves no room for individual preferences or the discovery of new knowledge. Inevitably, such a plan turns into a national straitjacket.

If Mr. Pickens really wants to help the nation, he should promote the kind of planning that made him a success in business. That kind of planning is individual and opportunistic, not national and proscriptive. Long-term results emerge from individuals responding to rapidly changing opportunities, not from one individual commandeering an entire industry.

Mr. Pickens has demonstrated the ability to make opportunistic business decisions, and for that he should be admired. But success in business does not qualify him or anyone else to engineer a master plan for America's Great Leap Forward. Believing in such a plan is a mistake; following it would be an even bigger one.

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