|

Romney continues to peddle the fiction that America has almost ceased to be a free-market economy

When Mitt Romney formally launched his bid for the Republican presidential nomination a few months ago, he said this:

“Government under President Obama has grown to consume almost 40 percent of our economy. We are only inches away from ceasing to be a free market economy.”

The former Massachusetts governor said much the same thing last night at a GOP presidential debate in Iowa. And again, as in his previous use of such rhetoric, PolitiFact has labeled his claim a PANTS-ON-FIRE FALSEHOOD.

Most economists, conservative and liberal alike, scoff at the notion that the increase in government spending (as a percentage of GDP) during the recent economic difficulties represents a threat to economic freedom.

Moreover, the tax burden of government at all levels actually has declined in the past five years and is now near an historic low.

Even the conservative Heritage Foundation ranks the United States near the top among industrialized nations in terms of economic freedom.

Then, too, Romney seems to imply that there was a time when the American economy was completely free and unfettered by government, which is absolute nonsense.

Except for a few isolated examples of bartering and such, ours has never been a free market economy. And efforts to make it so often have been disastrous.

As Craig Barnes OBSERVED just last year:

Millions of Americans are today unemployed because the free market is not working for them. Millions of Americans have lost their homes because the free market did not work for them or for the banks. Before the health care bill passed last January millions could not get health care because the free market worked for them when they were healthy but often did not work at all when they needed care.

The free market sent jobs to China and Mexico, India and Taiwan. The free market encouraged subprime mortgages and collateralized debt obligations that were collages of numbers that the market itself did not understand. The free market encouraged insurance companies to compete for ways not to pay for health care rather than to encourage ways to provide health care.

During the years of the Bush administration’s free market advocacy, Bear Stearns collapsed, Merrill Lynch failed, and Lehman Brothers collapsed. The free market enabled Goldman Sachs to act as if it believed in securities that it sold to others while at the same time betting with its own money that these securities would fail. To knowingly induce buyers with misinformation is intentional fraud, but the free market did not and has not ever protected against intentional fraud.

In a free market, British Petroleum risked environmental catastrophe in order to save money on expensive cement or time-consuming testing and used cheaper designs rather than safer ones for the most complex drilling apparatus in the world. Transocean obeyed the demands of the market by not fixing 390 maintenance items that were back-listed, ignored a leak in the control pod of the blowout preventer, and avoided the delay caused by its gas detection alarms by simply shutting them off.

And as Charles A. Clarkson OBSERVED two years ago:

The fact is, our markets aren’t free, nor should they be. The only really free markets we’ve seen in my adult lifetime were the Miami area after Hurricane Andrew and New Orleans after Katrina. For a day or so, “entrepreneurs” could sell ice, plywood or any other critical item for as much as they could get. Then civilization enforcement stepped in via law enforcement and shut them down.

Civilization and a truly free market can’t coexist. Even those bastions of free market capitalism, the NYSE and NASDAQ can’t function without myriad rules, regulations and laws, and the go-go Alan Greenspan era of market freedom was predicated upon them (in fact, the demise of some those rules, such as the SEC uptick rule repealed in 2007, contributed mightily to the current crisis).

 

Share:

Leave a Reply

Your email address will not be published. Required fields are marked *

CAPTCHA Image

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>