24 Sep 2008

"Free Market" Bush and Paulson Discredit Free Market

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The leftists have not missed the irony in the latest power grabs by Paulson & Friends. This is why it’s so annoying when mainstream Republicans run on a “small government” message and then do the opposite in office. From the article:

Of course, the ironies and the potential pitfalls of this administration enacting a socialist takeover can hardly be overstated. This is the political party that for decades has insisted on deregulation and free markets, has scolded Hugo Chavez for nationalizing the oil industry, and even now is attempting to tar and feather Barack Obama with the label of socialist. But if this bill is enacted at its advertised $700 billion price tag—and many people believe the price will ultimately prove higher—it means that the Bush administration has undertaken the single largest socialist investment in the history of mankind. The Bolshevik revolution of 1917 couldn’t dream of an economy worth $700 billion; the figure dwarfs anything ever attempted by Fidel Castro or the Sandinistas.

Focusing on ironies and hypocrisy is fun, but Paulson’s socialist prescription actually provides a rare opportunity to advance the state of American political and economic debate. During the Cold War, socialism became an especially unsavory idea because it was linked to the countries that pointed missiles at us. This was less the case in Europe, where democratic socialism grew to become the norm, with sometimes rocky but mostly successful results (you don’t see the Spanish having to take over their banking sector, at least not yet). Paulson’s relatively untainted socialism offers America a genuine Nixon-goes-to-China moment, a chance to have a more honest, less demonizing conversation about where, when, and how government intervention in the economy is effective and desirable.

I have been resisting the easy urge to label George Bush as “the worst president in US history,” as some of my exasperated colleagues have done. Partly I resisted because I knew that FDR expanded government more than Bush.

However, at least FDR had the decency not to label himself as a believer in laissez-faire.*

* I know that during his campaign against Hoover, FDR criticized Hoover’s reckless deficit spending, while Hoover talked about his unprecedented interventions against the advice of the crusty economists. But I’m assuming FDR wasn’t the economic “conservative” in his campaigns the way Bush allegedly was.

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