by Barry A. Liebling
The United States has two major political parties – Democrats and Republicans. While there are a number of alternative minor parties the government is completely dominated by members of these big institutions.
How are the major players different from one another? For at least the last one hundred years they projected distinctive images. In the economic realm the Democrats assert that government can and should solve problems by directing, supervising, and sometimes curtailing the actions of businesses. They favor laws and programs that put the government in charge of what citizens buy and sell. The justification offered by Democrats is that official experts know best how to identify what is “good for society” and ordinary people – left on their own – are prone to doing the wrong things.
The traditional Republican position is to endorse free markets. While very few Republicans consistently support Laissez-faire – where government stays out of the private economy, most say they favor minimal regulations. The underlying idea is that when people manage their own lives – without coercion – the net result is prosperity. And even more important is the principle that individuals have natural rights to “life, liberty, and the pursuit of happiness” which implies that each person should have self-sovereignty. And it is not moral for the government to boss people around.
So to what extent are the two leading political parties practicing what they preach? How well do their actions correlate with their purported principles? The Democrats do a pretty good job. No matter what the issue or problem is, you can count on the Democrats to endorse new laws, regulations, and government organizations to step in and take charge.
What about the Republicans? They have a long history of wandering around. To their credit, sometimes they push for free markets. But too often – and in contradiction to what should be their principles – they join the Democrat parade where the result is an increase in government interventions and a reduction in liberty.
In 1972, more than a half century ago, Republican Richard Nixon was elected President for a second term. His opponent was Democrat George McGovern. There was a lot of interest in the campaign because Nixon and his enthusiastic supporters purportedly were for free markets. By contrast McGovern was insisting that the government should intervene much more. The irony is that a year before the election Nixon announced, “I am today ordering a freeze on all prices and wages throughout the United States.” The country-wide controls were in effect until after the election. So much for having actions align with rhetoric.
In 1988, Republican George Bush the elder famously and loudly pledged if he were elected there would be “no new taxes.” And after he became President there were plenty of new taxes.
We are now in the second presidential term of Republican Donald Trump. What is the Republican party’s stance on free markets versus government interventions? Yes, some Republicans consistently endorse liberty. But many of those in charge are out-performing the Democrats by pushing and concocting excuses for massive government meddling.
From the beginning of 2025 the Republican administration has instituted tariffs. Of course tariffs protect some businesses in the United States because they make it more expensive to purchase goods and services that are produced in other countries. But the benefits to the favored businesses are paid for by Americans who are spending more because the tariffs are in place. Some prominent Republicans have said that adhering to free market policies – where tariffs are prohibited – is an old-fashioned idea because it permits foreigners with better or cheaper products to out-perform American companies. They attempt to resurrect mercantilism by claiming that in today’s world protectionist policies are the best way to help domestic businesses.
Intel has long been a leading company that produces computer components including central processing units. When it got into financial trouble the current Republican administration directed the government to purchase $8.9 billion of its common stock. This might help Intel in the short run, but it is the classic move of socialist countries that acquire equity and take over private businesses. Does this mean that any time a large business is having difficulties the government will rescue it (if its management is on friendly terms with the current administration)? According to Republicans what are the limits of the government getting hold of private enterprises? Unfortunately, some (who consider themselves more sophisticated than “naive” free market advocates) see no limits and are in full agreement with democratic socialists. https://www.intc.com/news-events/press-releases/detail/1748/intel-and-trump-administration-reach-historic-agreement-to
Recently the Trump administration has called for a 10% cap on credit card interest. The argument is that some people are paying 20% or more in interest, and that is too much and is an unfair burden on credit card users. Of course, bank executives are rejecting the proposal and assert that higher interest is the appropriate policy when they are dealing with high-risk borrowers. https://www.usatoday.com/story/money/2026/01/20/trump-credit-card-interest-rates-cap/88270044007/
Notice that the proposed 10% limit on interest is unadulterated socialism. The government decides how much something will cost, and the market is discounted to zero. If this ill-conceived rule comes to pass the natural response of the banks would be to deny credit cards to people who are risky borrowers. So those who were paying high interest on their cards will have to find other ways to borrow money. They might go to loan sharks where the interest is even greater.
Those Republicans who support the credit card 10% cap are revealing their true colors. They embrace the tactics of a command economy and are not sympathetic to free markets. What additional mischief will they attempt to implement next? If they are not shy about putting a lid on interest rates they may attempt to forbid banks from acting in their own business interests. And that would be a telling blow against liberty.
What can we conclude from the recent Republican embrace of economic interventionism? Certainly some Republicans (and probably some Democrats) appreciate and endorse the principles of free markets. But those of us who value liberty cannot depend on the Republican party to act properly. We have to explain and argue our case for individual freedom more widely and more persuasively. Appealing to political party membership is not likely to be productive.
*** See other entries at AlertMindPublishing.com in “Monthly Columns.” ***