Bush Is No Champion of the Free Market

Bush Is No Champion of the Free Market

November 14, 2008. Reprinted with permission from the Ayn Rand Institute.

Washington, D.C.—In a recent speech on the financial crisis, President Bush said, “If you seek economic growth, if you seek opportunity, if you seek social justice and human dignity, the free market system is the way to go.”

According to Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “It’s true that free markets are the source of economic prosperity and individual liberty—but President Bush, while he may pay lip service to free markets, has been a consistent opponent of them.

“Did Bush abolish the countless regulations and controls strangling businessmen? No. But he did sign into law Sarbanes-Oxley—the largest expansion of business regulation in decades. Did Bush consistently push for free trade? No. But he did give us a new steel tariff. Did Bush attempt to roll back America’s massive welfare state? No. But he did pass the prescription drug benefit, the largest new entitlement program since Lyndon Johnson’s Great Society. Did Bush curtail government spending? Far from it. Bush presided over an unprecedented increase in the federal budget: from $1 trillion at the time he took office to more than $3 trillion today. This is to say nothing of Bush’s response to the financial crisis. He has completely evaded his administration’s responsibility for the Fed and housing policies that created the housing bubble. Instead, he has led the chorus blaming the market and calling for unprecedented handouts, bailouts, and nationalizations as the cure.

“If Bush is a friend of the free market, who needs enemies? By praising the free market while systematically undermining it, Bush has done more to discredit capitalism than any open critic could. Like a con artist who undercuts the reputation of Mercedes by selling lemon look-alikes, Bush has now led people to associate his failed policies with capitalism. That association needs to be erased. We must make it clear: Bush is no friend of free markets.”

It Doesn't Matter Who Is President

It is nearly impossible to know what a politician will do in office. I blame pragmatism for that difficulty. Nearly every politician succumbs to pragmatism, and pragmatism means that his ideas are divorced from his actions. Ideas are floating, unreal constructs to him, and actions are taken in response to range-of-the-moment considerations. As a result, any politician who proclaims certain ideals will not take those ideals seriously when he is in office. Instead, when he arrives in office, he responds to the day-to-day pressures that buffet him.

The question then becomes, what kind of pressures buffet him? When Jimmy Carter was president in the 1970s, an intellectual rebellion against regulation had arisen, led by figures such as Milton Friedman. Given the country’s economic malaise that Carter’s and his predecessors’ policies had produced and the need to “do something” new, Carter acquiesced to the de-regulationary proposals of Alfred Kahn and others. As a result, it was under Jimmy Carter’s administration, a left-wing Democrat, that airlines, trucking, and railroads were deregulated in the United States.

Consider also the example of Bill Clinton. Faced with the “swing to the Right” embodied in the 1994 elections, Bill Clinton, a conventional left-winger, relented and inaugurated partial welfare reform that reduced the future growth of welfare spending by billions of dollars.

Then consider the examples of Bush Sr. & Jr. Each Bush claimed to be for free markets. We “read the lips” of Bush Sr. on “no new taxes.” We also heard the claims of Bush Jr. to be for free markets. Yet Bush Sr. raised taxes when he was confronted by the pressure of Democrats and fellow Republicans complaining about a large budget deficit. For his part, despite his avowed “free market” stance, Bush Jr. could not resist the cries for protection from steel producers, most of whom, undoubtedly, donated large amounts of money to his election campaign. Therefore, he raised steel tariffs.

The examples I have cited show that party affiliation is a poor predictor of what a candidate will do in office. Also, his stated views have little bearing on what he will do. Rather, because of pragmatism, each candidate responded in a range-of-the-moment fashion to the general pressures around him. Carter and Clinton, although ostensibly anti-business Democrats, partially reduced regulation and the growth rate of welfare. Bush Sr. & Bush Jr., two ostensibly free market Republicans, presided over tax increases and protectionist policies, among other statist measures.

All four presidents were pragmatically responding to the “pressures of the day,” not the dictates of party or conscience.

I suggest that we try to understand what will be the “pressures of the day” tomorrow that will bear on McBama, when he is elected. I posit that those pressures will determine the policies, not the man. Moreover, I will venture that there are two sets of strong pressures that will influence him: (1) environmentalism, and (2) fear of intransigence vis-à-vis Islam. Thus, the next President, whoever he may be, will continue to enact alternative energy and anti-carbon policies, and will continue to take half-measures against the Islamists. I do not think it matters which man is President.

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Note: This post first appeared as a response to Burgess Laughlin's comment on my prior post.