Republicans’ Half A Loaf (2012 Jan)

by Barry A. Liebling

These are challenging times for those of us who value and yearn for a free market economy. The best we can expect is a near future that, while not ideal, is somewhat better than the present.

Since Barack Obama became president he has succeeded in shoving the country sharply to the left. The president has orchestrated the bail out of large companies that should have been allowed to go bankrupt. He has unleashed a Democratic congress to fund a tremendously extravagant and completely ineffective stimulus bill. The president is largely responsible for the birth of ObamaCare and the passage of the Dodd-Frank Act. Under his guidance the number of new federal regulations and future tax liabilities have exploded to all time highs. He has been consistently true to his progressive theme – when times are tough the solution is government intervention and expansion. If that does not work there is always Plan B – intervene and expand the government even more. When things get better and the country is prosperous again that is the signal to demonstrate generosity by lavishly expanding government entitlements.

To a free market advocate the ideal solution would be to elect a president in 2012 who understands and appreciates the limited role that government is supposed to play in the economy. That is – protect individual rights, prevent force and fraud, and act as the impartial referee that neither rewards nor punishes any particular industry, company, special interest group, or person.

As of this writing the politicians who are most likely to garner the Republican nomination are former governor Mitt Romney and former Speaker of the House Newt Gingrich. Each is depicting himself as diametrical to President Obama – a champion of free markets and capitalism. Unfortunately, a perusal of the facts reveals that neither candidate has a history of walking the walk.

Mr Romney – who boasts endlessly about his experience as a venture capitalist in the private sector – is famous for changing his positions frequently, presumably in an effort to court voters. When he was governor of Massachusetts he brought about a statewide healthcare system – with an individual mandate – that is so similar to ObamaCare that witty critics refer to it as RomneyCare. He defends his record by insisting that ObamaCare is wrong-headed because it is federal and it bullies all Americans. By contrast, Mr Romney argues that what he passed as governor is acceptable because it merely abuses Americans who live in Massachusetts.

Mr Gingrich is renowned for being very quick-minded and having a plethora of creative governance ideas. To be sure, some of his proposed policies are free-market friendly. But others seem to come from the progressive playbook. He has been criticized for consulting for Freddie Mac after he left congress. But it is his attitude not his business arrangements that are most in conflict with free market philosophy. According to The Wall Street Journal Mr Gingrich defended his involvement with Freddie Mac by saying that GSEs (government sponsored enterprises) are often appropriate. He asserted that there are times “when you need government to help spur private enterprise and economic development.” Mr Gingrich further remarked that “it’s not a point of view libertarians would embrace, but I am more in the Alexander Hamilton-Teddy Roosevelt tradition of conservatism.” Clearly, Mr Gingrich’s level of comfort with government intervention disqualifies him as sincerely committed to economic freedom.

Some free market advocates are pessimistic. Why support a Republican candidate when he is very likely to act as a hesitant, slow moving, apologetic Democrat if elected? Memories of George Bush the younger’s dreary economic policies are fresh. A few defenders of capitalism have remarked that it does not matter whether President Obama is re-elected or replaced by a lackluster Republican. The country is sure to slide into worse times either way.

But you need not be completely discouraged. There are clear advantages to electing either of the flawed Republican candidates.

Consider first how President Obama will act if he gets a second term. He will have four additional years to push the agenda he most fervently believes in. Obama will do everything he can to consolidate and strengthen the government’s hold on all aspects of American life. He regards the private sector as being vital and useful for generating wealth that can be confiscated by the government to fund “socially significant” projects. But the only private companies he has any affection for are those that are part of a “public-private” partnership – that is supervised by government. If critics brand President Obama as a statist during his second term he will not flinch since it is an accurate description of his life-long ambition.

Now consider what we can expect from Mr Romney or Mr Gingrich. Each has a history of changing positions, and you cannot be certain exactly what policies they will pursue. But each has the asset of describing himself as private-sector, free enterprise, capitalist friendly. This means that when they get off course and act like Democrats they can be – at least in principle – persuaded or shamed into doing the right thing. Unlike President Obama, both Romney and Gingrich would like to be regarded as congenial to economic freedom. While both will always be tempted to use the heavy hand of government to fiddle with the economy, each will at least listen to and consider the case for individual rights. Their receptivity to reason tips the balance in their favor.

In the near term there is no ideal scenario for the American economy. But the Republicans are offering half a loaf which is better than none.

*** See other entries at in “Monthly Columns.” ***

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