Grab hold of something quick, namely a newly invigorated regulatory state, because the economy is sucking us downward to some awful end, and, by the way, let go of Milton Friedman. The weight of his legacy will only make things worse.
That, in short, is the thesis of a New York Times Week in Review article that looks at the insistent liberal contention that if you are not forever supervising and directing markets you will have disaster. It tells us that the late, great Friedman's "laissez faire ideals" took over in America with the election of Ronald Reagan, but suggests we are now seeing the results - market forces gone awry - thus leading to calls for revived regulation. The Friedman era could be coming to a conclusion.
Excuse me, but what Friedman era? It's true that this Nobel Prize-winning economist had a huge impact on thinking in the country, mainly with his monetary theory but also in providing conservatives with insights and considerable data for their battles against big government. And here and there, the conservatives have had victories.
But 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 upwards during the years George W. Bush has been president - by about $30 billion since 2001.
Gattuso concedes that some regulations are beneficial as well as consonant with market principles, but notes the huge costs of overdoing it and the fact that some are themselves infringements on health and safety (as when the Food and Drug Administration keeps life-saving drugs off the market longer than needed). Friedman, in "Tyranny of the Status Quo," points to another issue - the way in which some businesses use regulation to give themselves advantages to the disadvantage of other businesses and to the public and economy as a whole.
While there is a leftist mythology to the contrary, free markets do tend to be self-correcting, and government intervention often makes things worse, as it did during the Great Depression. The much-told, erroneous tale is that President Franklin Roosevelt's New Deal saved the country, but Friedman knew this for the falsehood it is, and so does Thomas DiLorenzo, who investigates this subject among others in his book, "How Capitalism Saved America."
"Despite a doubling of federal government expenditures from 1933 (Roosevelt's first year in office) to 1940, the creation of dozens of new federal programs, and the direct employment of some 10 million Americans in government 'relief' jobs, the economy was basically no better off in 1938 than it was in 1933," the professor of economics writes. "Indeed, it was precisely because of all these programs and expenditures that the Great Depression dragged on until after World War II."
That's a thought to be kept in mind as so many people make the current economic downturn out to be something the likes of which we haven't experienced since the Depression and call for government to do more. The American Institute for Economic Research notes there have been 10 recessions since World War II, and others have noted how unemployment is still relatively low, housing ownership very high and how financial institutions are already fixing much that went amiss.
We may need some different regulations from the past, but we don't need a rejection of Friedman's understanding that excessive government control of markets enfeebles and ruins an economy.
Jay Ambrose is the former Washington director of editorial policy for Scripps Howard newspapers.