“It is simply a matter of trust in the people executing the plan.”
Need I really point out what Hayek says about the ability for planning to work? We can trust these people all we want, and they cannot have the knowledge necessary to make the plan work. We know these various forms of nationalization, pseudonationalization, control, “encouragements,” etc. don’t work. Bush started it, true, but Obama is putting it on fast-forward. Obama is simply playing follow the leader to Bush-Paulson on the economy. So far his policies seem to be to do all the things that caused the economic collapse in the first place. This housing bubble was caused by Greenspan’s manipulation of interest rates, sending out false signals about the nature of risk in the economy at large, and in the housing sector in particular. We all trusted Greenspan with his manipulation of interest rates below what they would have been in the free market, and we see where that got us. Central planning failed again. So what’s the answer? Bernanke has lowered interest rates further, and Obama is pushing to get the housing bubble to inflate again.

F. A. Hayek used planning in a completely different sense of the term, Troy.

I distrust Barack Hussein because I distrust his motives. He isn’t just a bumbler and babe in the woods like Jimmy Carter. BH Obama is an active anti-American socialist who, like all liberals, admires all things which are nor American. He has no regard of moral hazard…I doubt he has ever even considered the concept. He has no regard for human life which is why abortion and infantacide were such important first moves for him. He has made common cause with Hugo Chavez and Fidel Castro. By the way both of them enthusiastically supported Obama for President…and now that he is President both of them are actively proclaiming that the era of America is over.

Not from what I’m reading. He admits over and over that he often it taking extreme examples to make things clear, but there is no doubt in my mind from what I’ve been reading of late that what Greenspan was doing was planning in exactly the way Hayek was talking about. Hayek also demonstrates that the idea of a plan of any sort working out exactly as you want it to is wrong. You cannot know enough to know your plan, whatever that plan may be (especially if it has any level of complexity at all — anything using only Newtonian physics would be the exception), will work out as you expect it to, and to have the outcome you want. Whether the planning involves knowing what will happen if you raise or lower interest rates, increase or decrease the money supply, etc., it is in fact planning, and it is the sort of thing Hayek was talking about. Yes, often Hayek was talking about the tight-reins control advocated by socialists, but he also talks about “socialist competition” and the problems with it. THere are lots of different kinds and levels of planning. But whatever the kind, level, etc. of planning you have, Hayek demonstrated that it will fail to have the outcome you thought you were going to get. More, life and history have demonstrated it.

I have no liking for Alan Greenspan, who acted as a partisan hack and made lots of serious errors while chairman of the Fed. We are living the consequences of those errors.
But Hayek’s entire argument against government planning applied to whether government could replace the market process with centralized determination of prices. When he wrote, the word “socialism” meant replacing the market with top-down control.
Not even the most insane right wingers have suggested that Greenspan was attempting to create a centrally planned economy.
Everyone acts in the market, or any other complex adaptive system, everyone plans, some succeed, some fail, and the complexity of the market as a whole means the more complicated the plan the more likely it is to fail at some point. But that’s another issue entirely.

Of course Greenspan wasn’t trying to create a centrally planned economy. I never made that claim. Greenspan’s planning only involved a specific aspect of the economy: interest rates. But it was planning in Hayek’s use of the term. Hayek does talk about partially planned economies as well, including planned sectors. He only talks about completely planned economies — by his own admission — as a way of simplfying the discussion. He expects the reader to be able to then apply the principles he lays out to various levels of planning, including planning in a single sector. Otherwise, Hayek’s works are really period pieces of absolutely no relevance once history has proven planning to be impossible. I”m currently reading “Individualism and Economic Order,” and I see relevant arguments for what our government is doing all over the place in it. I suspect the same will be true with the other books by Hayek I will be reading soon (I’ve been invited to the Hayek colloquium in June).
If you prefer, Greenspan was applying Keynesean macroeconomics to interest rates. It’s worked out as well as his monetary policy did. Either way, such manipulation is government control, and such control is done through planning. When governments get involved in the economy, they are always involved in a massive scale and necessarily are dealing in highly complex plans. That’s why they fail more often than not. Hayek’s point about it being a knowledge problem is applicable no matter to what extent the government is involved.

Since I find the economics a bit complicated, I look to other, simple things President Obama ought to be doing. We haven’t signed on to the land mine treaty. Why? Why is the School of the Americas still open? These things can be changed quickly and I don’t think they are even on the table.