The Abuse of Free Markets as Merely a Marketing Scheme

Financial Times recently published an article which questioned where our country goes from here, in regards to economic philosophy, given that confidence in free markets has been shaken. Although such confidence has certainly been shaken, the doubts seem to be based on problems not created at all by capitalism; prompting me to recall a wonderful saying that, “Corporate Welfare is not Capitalism.”

Many people thought that President George W. Bush was a conservative. He was a Republican and most Republicans are associated with conservatism. Conservatism is often associated with a visceral faith in capitalism. This ideological link can be traced back to the early 20th century and was cemented in modern times by Barry Goldwater, Ronald Reagan and the Newt Gingrich Congress.

There was a time when capitalism was the consensus view in the U.S., largely due to a backlash created by centuries of European mercantilism. When the U.S. was founded, its purpose was, abstractly, to create the first free society on Earth, at least in regards to citizens. The founders knew that the greatest threat to such liberty and prosperity would be the very government created to protect it. That vision was embraced, expanded and wrestled with for over 230 years now. Conservatives often claim to be the guardians of these ideals of the American Revolution.

However, many Republicans are neither Conservatives nor believers in free markets, but say they are. Meanwhile, many Democrats, especially so-called "blue dog Democrats," do embrace such policies. This is probably because a free-market element has become necessary in national political marketing campaigns, because people in this country have come to see how important a free system is. However, in practice, many Republicans have chosen to embrace important themes which run contrary to all that capitalism, conservatism and the U.S. Constitution stands for. These integrity-lacking Republicans should be identified for what they are, and outright rejected by the Republican Party. President Bush was one of these Republicans (another good link for this here).

In recent years, there has been a movement by Republicans to engage in corporate welfare in the name of free markets. President Bush believed very strongly in centralized planning and government empowerment. (I speak specifically on why these things are so bad in another blog). He seemed willing to undermine the free market constantly. Sure, he signed what he called a “tax cut,” but these menial tax rebates were an insult to tax payers, in the face of substantially increased government spending, and his promises to overhaul the tax code.

Bush rarely even claimed to be a conservative, outside of social issues. If you look at his education plan, health care plan, and general spending - his is presidency looks more like Pres. Lyndon Johnson's than any other president and he has often openly compared himself to Pres. Harry Truman. Both were liberal Democrats. Bush is also known widely as a “neo-conservative,” which is, in fact, a type of liberal because of the neoconservatives adopt the views of Woodrow Wilson, Harry Truman and Lyndon Johnson in regards to spreading democracy overseas. Also, instead of a conservative, Bush referred to himself as a “compassionate conservative.” In hindsight, that means he was a liberal Republican. In fact, he has even been quoted as saying that he “threw his free market principles out the window.” President Obama and Cong. Barney Frank have criticized Pres. Bush as a "deregulator." However, Yale Law professor Johnathan Macey has reported on the evidence that president Bush substantially increased government regulation of the economy. In fact, President Bill Clinton was much more of a free marketer than Pres. Bush, and continues, rightly, to stand by his deregulations. (As reported by Reason magazine on November 21, 2008 in an article entitled "Obama's Clinton Problem.")

This being the case, Bush should never be regarded as a conservative or adherent to free markets. Championing free market capitalism was a marketing scheme used to win elections and pacify the conservative base. If actions speak louder than words, than Bush’s presidency is no indictment of a free market system – in fact, it is very good piece of evidence to argue in favor of such a system.

The answer to “what direction should we go from here?” is clear. We should return to our basic American values of a capitalist system: enforcing the plain meaning of the Constitution, empowering individuals to make choices for themselves, seeking a system that values individual economic rights and a free economy. When people like Barney Frank and other attack such a system, they are actually saying that people cannot be trusted to be free and to make their own choices – they need a government to do so for them. A centralized system, which looks to government as the constant savior, is doomed to long term failure.

President Obama clearly shares Bush’s faith in government centralization and reduced individual empowerment. Our economy will suffer because of it.