As I listened to the speeches, it seems their message of change is: If we have more tax cuts for the wealthy, eliminate government regulation and maintain our aggressive foreign policy, free markets will magically solve all our problems for us.
Come again? This is change?
I believe in the power of free markets and capitalism as much as anyone – but not because free markets are some sort of revelation from heaven. (I’ve searched, but I haven’t found the section in the D&C that covers that subject.) I believe in American free enterprise because it works, and it works because our system allows for common-sense adjustments along the way. Whether it was Teddy Roosevelt’s anti-trust laws, Woodrow Wilson’s estate tax, or Franklin Roosevelt’s reform of the banking system, American free enterprise works because it evolves to meet changing conditions. The founding father of free market economics, Adam Smith, was remarkable in his insights on this subject when he wrote the following over 200 years ago:
The proposal of any new law or regulation of commerce which comes from this order (capitalists), ought always to be listened to with great precaution, and ought never to be adopted till after being long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it….Regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments.
Let’s look at what the Republican philosophy of free enterprise has accomplished the last eight years.
Yesterday, it was announced that the federal government is taking over Fannie Mae and Freddie Mac to keep them from going under and taking the whole economy with them. This bailout will cost taxpayers billions, not to mention the fact that the bursting of the mortgage speculation bubble is the main cause of the current recession. While anti-regulation Bush appointees were asleep at the switch, these two government-backed entities were investing in risky mortgage securities; mortgages that, we now know, lenders were questioning when the loans were made. We’ve heard numerous stories about how individual mortgage brokers challenged their managers about these insane loans, only to be told, “The underwriters (backed by Fannie and Freddie) are willing to buy them, so don’t ask questions.” The complete ramifications of this reckless policy are still unknown, but they are potentially devastating.
We’re paying almost $4 a gallon for gasoline and sending $700 billion out of the country every year to pay for oil imports because our nation has lacked a forward thinking energy policy, instead trusting the markets and Big Oil to deliver us. In response to our current crisis, the delegates to the RNC raised the chant, “Drill, baby, drill! Drill, baby, drill!” Respected journalist Tom Freidman remarked this week that chant at the cusp of the ET (energy tech) revolution is equivalent to shouting at the beginning of the IT revolution, “IBM Selectric Typewriters, baby, IBM Selectric Typewriters!” According to Freidman, industry leaders like GE’s Jeffery Immelt have said that American industry is ready to invest the billions it will take to make America the world leaders in ET and unleash our nation’s formidable innovative spirit – but not until we have a national energy policy that will ensure these investments will not be at risk from volatile energy prices. Markets are the solution, and we should let innovation rather than government select the best path forward, but the markets need some reassurance that the risks will be worth the investment. Our future economic leadership in the world is as stake over this question.
Let’s not forget the decimation of our manufacturing base, with the resultant loss of high paying jobs the last decade, because our nation is alone among the major industrial powers in lacking any sort of national industrial policy. This is in addition to saddling our industrial base with the sole responsibility for paying the exploding costs of health care for their employees.
What about improving education? Despite the fact that voters in the most conservative state in the nation (us) rejected this idea by a margin of almost two-to-one, Senator McCain’s answer to improving education was – you guessed it – private school vouchers.
I sat in open-mouth wonder as Mitt Romney and others at the RNC hurled zealous invective that blamed America’s problems on “Washington’s liberal elite”. Forget for a minute they’ve had the steering wheel for the last eight years. Just what exactly are the “liberal” policies that have created our current economic mess?
I have a message for Romney and other High Priests of the Church of Unfettered Capitalism. Please forgive me; you’ve heard the following quote from me before. But the last few years have proven the truth and wisdom of the following words from American statesman and historian Arthur Schelesinger Jr.:
The object of (American) liberalism has never been to destroy capitalism, as conservatism invariably claims – only to keep the capitalists from destroying it.