Judd Gregg: Democrats do not understand risk’s benefits

One of the great disconnects occurring today revolves around the concept and purposes of “risk.”

On one side of the divide are those who govern, especially those who populate President Obama’s party.

On the other are those who are governed and still participate in the private sector.

The present Democratic Party is now dominated by those who have a natural inclination to not have much confidence in their fellow Americans’ ability to choose for themselves.

It is a party that has as one of its primary tenets that a government led by well-intentioned and better-educated people should decide how average folks should live their lives.

Whether it is through having the government set the parameters regarding healthcare needs and insurance coverage for everyone, or through restricting the private sector activity at all levels, the goal is to allow a few (that is, those who govern) to choose for the many (that is, those who are governed) as to how things should be.

One of the core beliefs of this approach is that taking risks is not acceptable if the endeavor being undertaken affects others.

This concept leads logically to a belief that most major efforts that impact the society’s daily activity, such as healthcare, energy, banking and education, are really not arenas that should be left to any great degree to the private sector but rather should be treated as public utilities.

Taking risks in these areas that lead to profits or, equally disturbing from the viewpoint of the governing class, failure, simply should not be allowed.

Rather, it is the responsibility of those who govern to step in and protect the society from the effects of profit or implications of failure.

This would be great thinking if the economic activity necessary to create a vibrant energy sector or healthcare system or banking community or education establishment fell from trees. But it does not. Nor does it fall from the government or those who govern.

Strong energy, healthcare, banking and education activity results from investment. It results from people who are willing to take a risk and use their own resources, their savings either individually or collectively through vehicles like pension funds, to support others who are growing these sectors through their initiatives.

As much as the people in this administration — and those who populate the Senate committees of jurisdiction — may try to deny it, the vitality of these sectors is not a function of their brilliant ideas, regulations or laws. It is a function of individual risk-takers.

The attempts by the governing elite to circumscribe the downside of this risk-taking through massive regulation or to mute the upside of this risk-taking through an excessive tax burden does not accomplish the goal of making the system strong, safer and fairer. It has the exact opposite effect.

If, in a market economy, you suffocate the ability to take risk, you do not produce a better atmosphere for jobs and expansion. Rather, you create an atmosphere for mindless muddling and water treading.

Risk is the essence of what drives a market economy forward. The government role is to mitigate it in cases where it could threaten the entire system. But it is not the government’s proper role to oppose and crush it as a force for economic growth because it is seen as violating rules of social concern.

It is ironic that these social tests are laid out by folks who have chosen for themselves the insular path of government participation rather then being willing to subject themselves to the risk of failure and need for effort inherent in participating in the private sector.

Put bluntly, market economies and the risk-takers they require are anathema to this administration and its followers in Congress.

The governing class would much prefer to control the activities of the many, while purporting to be protecting them from themselves. This is a large part of the answer to a question that many ask: Why are we still in an economic “malaise,” to use the language of the left from the late 1970s.

Economic activity and growth do not arrive deus ex machina or from well-intentioned government excess.

If you have an atmosphere where people are not encouraged to invest their capital, where there is rampant uncertainty as to how far the government will go in stifling enterprise through regulations or reducing returns through taxation, then you do not get the risk-takers stepping up.

You do not get robust economic growth.

You do not get jobs.

In the end, the things these well-intentioned people who govern say they want for those they see as their charges will not be realized.

Governments do not create prosperity. People who believe in themselves and their dreams, and who are willing to take risks to realize them, do.

Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee. He is the CEO of SIFMA, a financial industry lobbying group.