What if Big Brother (Government) Turns Out to be a Bully?

Harsh recent criticism of our free market economic system has resulted from the long standing belief that the greed and self-interest that drives our private sector were the major culprits of our current financial and economic mess. Some of those critics now believe that government control and regulation offers the only solution to the problem and many elected officials are seizing the opportunity to insinuate government into many of our major industries, including automobiles, banking, energy, healthcare and many others.

Although the free market system is far from perfect, history has clearly demonstrated its superiority to all others, especially systems where government has primary responsibility for driving the economy. And, if “greed” and “self-interest” are the catchwords of private sector capitalism, “corruption, waste and inefficiency” have become common descriptors of the public sector and government.

Furthermore, somewhat ironically and despite the rap against the private sector, it is clear that government was complicit in the acts that led to our financial debacle. First, during the prosperous 1990s the Clinton Administration paved the way to financial ruin by implementing a public policy that encouraged home ownership among our most economically-challenged and pressured banks into providing financing that ultimately led to an explosion of sub-prime mortgage lending. That policy, coupled with others that encouraged banks to lever up their balance sheets as an easing monetary policy reduced interest rates to multi-generational low levels, created a financial maelstrom we have barely been able to escape. In addition, the Bush Administration, by its own admission, knew this disaster was coming and claims to have urged Congress to take preemptive action to prevent it. It should have tried harder.

America is now being asked to choose between the free market’s invisible hand and the dictatorial hand of government. A free market system allows us to choose the products we wish to consume; it relies on prices set by the interaction of supply and demand, which ensures that suppliers offer products consumers want to buy. A government run economy encourages us to vote for public servants who we must trust will represent our interests; it relegates production decisions and who and how much we consume to public sector bureaucrats. Do you want the government telling you what car to buy, how much energy to consume, and what healthcare you will receive?

If you still believe bigger government is the answer and have faith that our government will serve our best interests, consider the following: First, even though government does not take private sector pride in greed and profit motives, it trades money for power and plenty of both is involved in greasing the gears that drive government and its participants. Second, many of those wanton capitalists from the private sector ultimately seek government office, and not necessarily because they feel an overwhelming desire to serve the public. Third, Barack Obama did not become president by accident; he had the greatest financial backing of any presidential candidate in history, especially from the liberal rich and famous, and received a resounding if tacit endorsement of most of the mainstream (read liberal) media. Contributions to all election campaigns last fall totaled more than one billion dollars and media support for Obama’s candidacy could not have been more apparent. It should be no surprise to anyone that our president (who campaigned as a moderate) should be pushing an emphatically liberal agenda, instead of pursuing the center-right interests of the American public who voted for him.

The last 100 years of world history has proven that economies work better as free markets than under government control. But even capitalists know that there is a role for government to play in correcting the failures of free market capitalism. That’s what our government should be doing, not attempting to supplant our free market system altogether.