Peggy Noonan's weekly column in last Saturday's Wall Street Journal was entitled, "Socialism Gets a Second Life." It was about the rising popularity of Bernie Sanders, the self-avowed "democratic socialist," and what explained his popularity among younger voters.
It all made sense until near the end of the article, where Noonan wrote: "Do you know what's old if you're 25? The free-market capitalist system that drove us into a ditch."
Whoa, time out! What "free-market capitalist system" are you referring to, Ms. Noonan? You'll get no argument from me about the "ditch" part. Indeed, we have suffered through a multi-year economic funk that has left many young Americans on the outside looking in. But to write that it was a "free-market capitalist system" that produced these justly lamented conditions is an egregious error.
(Image via Damian Gadal/flickr)
Our current economic system is anything but "free-market capitalist." Under the last two presidents, annual federal spending ballooned from $1.86 trillion in George W. Bush's first year in office to $3.75 trillion in the last year -- enough to raise the national debt from $5.7 trillion to $19 trillion today.
The housing and financial crisis of 2007 and 2008 resulted from political interference with free markets. (A few lowlights: the Federal Reserve held interest rates artificially low; the administrations of Presidents Bill Clinton and G.W. Bush used regulatory pressure to induce financial institutions to issue mortgages without verifying creditworthiness; Fannie Mae and Freddie Mac issued loads of risky mortgage-backed securities that went bad.)
Since then, we have not embraced freer markets, but instead have increased government intervention and made markets less free.
The unjust TARP bailout was followed by President Barack Obama's non-stimulating "stimulus" federal borrowing and spending of additional hundreds of billions of dollars. The Fed essentially suspended the market prices -- interest rates -- that coordinate present with future production with its prolonged zero-interest rate policy. Key industries have been brought further under the control of the federal government -- health care via Obamacare; energy via EPA throttling of coal, Interior Department resistance to drilling for oil on public lands, subsidies for green boondoggles, etc.; the financial industry by Dodd-Frank's unaccountable Consumer Financial Protection Bureau; the home mortgage industry via the nationalization of Fannie and Freddie; the semi-nationalization of the college loan market.
Government regulation continues to increase and now costs Americans nearly $2 trillion per year. The highest taxes in the world on corporate profits drive some companies offshore and contribute to a pervasive anti-business climate that has brought us to the worrisome condition of businesses closing at a faster rate than they are opening, thereby reducing job opportunities. "Free markets"? Not even close.
It's bad enough that progressives resort to Orwellian Newspeak -- calling an economy bludgeoned and weakened by massive government intervention "free markets" -- as a technique for unfairly discrediting markets and providing false rationalizations for more government control, but when The Wall Street Journal editorial crew lets them get away with it and, even worse, lends credibility to the lie, it's no wonder that kids don't know better than to latch on to Bernie Sanders' utopian socialist nonsense. (Indeed, as TheBlaze recently reported, many Sanders supporters can't begin to define socialism, but that's no excuse for our side not defending free-market capitalism from mischaracterizations.)
We have an uphill challenge ahead of us, but we need to explain to young people that the economy has struggled because President Obama has repeatedly attacked markets and waged economic warfare against the middle class that would have made Karl Marx proud, and that electing Bernie Sanders or Hillary Clinton would be to partake of more of that economically poisonous brew. If it's change that young people crave, then try free-market capitalism. That's the approach we haven't tried for too long a time.
Mark Hendrickson is Fellow for Economic and Social Policy with the Center for Vision & Values at Grove City College.
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