Liberals Supervising and Directing Markets

Jay Ambrose wrote a fine column published in the Washington Times on 18 April 2008 on a New York Times Week in Review article claiming that liberals need to supervise and direct markets to keep chaos from running amok. They say that the Milton Friedman era has passed. Jay Ambrose points out that "even if we are less burdened and more prosperous than many of our industrial rivals, we are nowhere close to the low-spending, low-tax, government-shriveled, regulation-reduced, libertarian dream embraced by Friedman. In many respects, we have been marching in the opposite direction."

"Right now, says James Gattuso of the Heritage Foundation, 50 federal agencies are enforcing 145,000 pages of regulations at a cost to the economy roughly equal to all the income taxes paid last year, some $1.1 trillion. And contrary to what some might guess, writes this research fellow, regulatory costs have been climbing upward during the George W. Bush presidency -- by about $30 billion since 2001." This $30 billion increase is substantial, though nothing like the rate we would have under a President Obama or Clinton.

Ambrose goes on to discuss how the tale that President Franklin D. Roosevelt saved the country with his New Deal is entirely wrong. He quotes Thomas DiLorenzo's book How Capitalism Saved America as showing that despite FDR's creating many new federal programs and directly employing about 10 million Americans in relief jobs, the economy was as bad in 1938 as in 1933 and only the post-war recovery ended the depression.

A minor slowdown in the present economy should not be sufficient cause for us to abandon the self-correcting wisdom of the Capitalist system which repairs the wounds in the economy much more efficiently and with much less pain than do a gaggle of government bureaucrats. Those in favor of more government control and direction of the economy and of us as individuals are very adept at exaggerating problems to justify more government intervention. The fact that home values are now going up again in many areas of the country and that many companies just reported surprisingly high earnings for this last quarter shows that the harm to the economy of the housing credit and oil cost problems was probably exaggerated, in the best progressive tradition. Our motto should always be: "Trust the free market, stupid."