June 21, 2018

It’s Time to Repeal and Replace the Republican Party

Gop slash 2President Trump attempted Friday to put a smiley face on the defeat of the American Health Care Act (ACHA), known to its opponents as “Obamacare Light.” From his perspective, the failure to secure enough Republican votes to pass the AHCA will lead to a “better bill” in the long run, because that future bill will have bipartisan support. The president did not elaborate on how the bill he envisions would be better or what about this bill, which he virtually threatened members of his own party to vote against, he didn’t like.

Opponents of the AHCA opposed it because it was too much like The Affordable Care Act (Obamacare) itself. Trump’s comments beg the question for anyone hoping for less government in health care, rather than more: How exactly will participation by the Democratic Party make the next bill better?

It’s fair to say Trump is far from a typical Republican, especially on health care. He’s supported single payer government health insurance in the past, even as recently as his 2016 campaign. But what about the rest of the GOP? If the House of Representatives is any indication, merely tweaking and renaming Obamacare was a viable solution to what they have denounced for seven years as the first step down the slippery slope to socialism.

This is by no means an isolated incident in the GOP’s history. Despite running on reducing the size and influence of the federal government, Republican presidents and Congresses have consistently presided over more significant expansions than the Democrats. A look at historical data on federal outlays reveals that federal spending increases far more when a Republican is in the White House than under a Democrat, regardless of which party controls Congress.

Beginning with Nixon, federal spending has virtually doubled during the administrations of all three two-term Republican presidents. Even Eisenhower increased it fifty percent, despite two year-over-year cuts in 1954 and 1955, respectively, equaling the percentage increase under LBJ’s “Great Society” (although the latter was accomplished in one term). Spending increased far less under Democratic Presidents Clinton and Obama than under any post-war Republican president who served two terms. It seems unlikely that trend will change under President Trump, who has proposed $60 billion in increases to military and Homeland Security spending.

Republican rhetoric also typically includes “slashing” regulations on economic activity, but the reality rarely bears any resemblance to the rhetoric. Like many of his Republican predecessors, Eisenhower created an entire new department, Health, Education and Welfare, which paved the way for LBJ’s medical entitlements. Nixon created the EPA, which alone is responsible for some of the most stifling regulation on business. Reagan is widely credited for massive deregulation, but most of the meaningful deregulation was passed while Carter was president. George W. Bush’s only two meaningful economic policies were the economically destructive Sarbanes-Oxley Act and the TARP bailout.

Over the entire sixty-four years since 1953, voters truly interested in reducing the size and influence of the federal government have decried what have recently come to be called, “RINOs,” (Republicans-in-Name-Only). This is a term popularized during the Tea Party era to describe Republican politicians who run on shrinking the federal government, but who govern more like liberal Democrats once in office. If only a real Republican could be elected, say the grass roots, then the federal government would finally be brought back within its constitutional limits.

But when have these “real Republicans” ever existed? Once upon a time? If one goes back to its founding in 1854, the Republican Party was the big government party. By 1860, the platform included all the familiar big government planks from its predecessors, the Whigs and the Federalists. And spend big they did, particularly on railroads and other infrastructure, in addition to raising protectionist tariffs.

It wasn’t until Woodrow Wilson and the new Democratic Party leapfrogged the Republicans in terms of big government that Republicans even campaigned on shrinking the federal government, which wasn’t exactly a radical idea following the spending and regulation ramp-up during the largest war in human history to that point. Evidently, Warren Harding and Calvin Coolidge are the only “real Republicans” to have ever occupied the White House. And let’s not forget that both merely returned policy to that of their 19th century Republican predecessors. Harding and Coolidge praised Alexander Hamilton’s economic policies and governed accordingly.

Considering the present Republican administration, there has never been a better time for those truly interested in smaller government to confront reality: the ninety percent of Republican Congressman who would have voted for the AHCA are the real Republicans. They represent what the Republican Party has been about for the entire 163 years of its existence: big government conservatism.

It’s time to repeal the GOP and replace it with a party truly committed to less government, free markets and a peaceful foreign policy. While the numbers associated with third parties are not encouraging, one cannot ignore the vast potential represented by that half of the electorate who don’t vote at all. Together with the large number of Republican and Democratic voters who “hold their noses” and vote for the lesser of two evils, a new party formed from the Libertarian, Constitutional and Reform Parties, marketed to disaffected non-voters, could represent a viable alternative.

At this point, what could those seeking smaller, less intrusive government possibly have to lose?

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Does excessive noise help cause big government?

Does excessive noise help cause big government?TAMPA, February 24, 2013 ― “If there’s one thing I hate, it’s all the noise, noise, noise, noise!”

There’s not much to like about The Grinch before his sentimental conversion at the top of Mount Crumpet. But it’s hard not to sympathize with him just a little when he utters those words. If quiet was in short supply in 1966 Whoville, it’s completely nonexistent in 2013 America.

I walked into a Jimmy John’s sub shop last week for the first time in two years. They recently began offering all of their subs as lettuce wraps, making them permissible as an occasional treat for primals. I knew I had missed the delicious #9. What I hadn’t missed was the music. At 12:30 in the afternoon, Jimmy John’s plays it at nightclub volume. Ordering and waiting the 1-2 minutes it takes to get your food is bad enough. Eating there is out of the question.

There is scarcely a restaurant anywhere that doesn’t pipe music throughout its dining room and onto its patio. Gas stations now blare music at customers while they pump their gas. Supermarkets, retail stores at the mall, and even public parks have all followed suit.

If it’s not music, then it’s television. Doctor’s office waiting rooms now bombard the ears and the psyche with vapid programming clattering off every uncarpeted surface. So do most auto repair shops.

There is virtually no spot accessible to the public that does not fill the soundscape with music or television. Even libraries are following the trend.

I know I sound like an old guy in baggy gray pants and a Humphrey Bogart hat, but I’m not. I love music. I love loud music. I played in bands for over twenty years and still like to crank up my Marshall amp and let some AC/DC rip on my vintage guitar.

I have nothing against music or television and certainly respect private property owners’ right to play either as loud as they wish to.

I just wonder when and where 21st century Americans ever experience quiet, outside of their jobs. When do they have the kinds of stimulating conversations with friends that are impossible when shouting over a restaurant sound system? When do they just sit and think, reflect or daydream?

It’s possible that the answer is “never.”

The term “noise pollution” is generally associated with the left and its never ending quest to impede commerce and industry. The war on noise fits nicely into the leftist worldview that when humans are left free to pursue their happiness, they naturally destroy the environment, including the sound environment, causing harm to themselves, each other and (gasp!) their furry co-inhabitants.

But does noise pollution also help cause big government?

Read the rest of the article at Communities@ Washington Times…

Make Obama Watch Ghostbusters

Ghostbusters_coverIt’s now clear the indisputable facts of economics and history are not sufficient to prevent our government from embarking on another expensive, disastrous program. While debate on government destruction of the health care industry continues in the Senate, President Obama prepares to make a trip to Copenhagen. There, he and other elite “experts” will cook up a new assault on free enterprise – under the tired pretense of “saving the environment.” Since intellectual, scholarly attempts to convince our rulers of the error of their ways have failed, I humbly suggest a simpler solution: make President Obama and the U.S. Senate watch the 80’s classic, Ghostbusters. Everything they need to know about government’s role in the environment is there. It is presented simply enough that even a career politician can understand it.

The Ghostbusters story begins with three university professors who decide to try their hand in the private sector. They start a going concern with their own money to investigate paranormal activity. They face hard times early on, spending “the last of the petty cash” on Chinese food. They have a dearth of customers and face the same fate as the majority of new businesses in their first year: bankruptcy. There is no suggestion the government will bail them out. The market has seemingly determined there was not sufficient need for their services and they will have to figure out some other product to offer in order to make a living.

At that moment, a disturbance occurs in a local hotel and their first paying customer places an order. The Ghostbusters successfully capture the offending spirit and collect their fee. The incident results in some publicity for the young firm and business booms. Soon, the Ghostbusters are running their own commercials and have more business than they can handle. They bring on a fourth Ghostbuster to keep up with the demand.

So far, the story has been a happy one for all parties concerned. The Ghostbusters have achieved success and have become enriched. Why? They have earned their money by making New York City safer (more “ghost-free”) and have created jobs in the process. Most importantly, all of this has occurred through private, voluntary exchange. Customers pay their fees happily because the Ghostbusters offer them a service they deem worthy of the price.

But a story without a major conflict is no story at all. Ghostbusters is a superior story in that it correctly recognizes the source of all human conflict: government. Instead of the rather mundane epilogue the story would have had at this point, where competing firms enter the ghostbusting market, prices fall, and soon all of society can afford to have a paranormal housecleaning, the government rears its ugly head. A representative of the EPA knocks on the Ghostbusters’ door. What happens next couldn’t be more analogous to the real world.

The EPA agent Walter Peck is played to perfection by vastly underrated William Atherton. What is abundantly clear from his limited time onscreen is that, as a low-level federal agent, his primary motivation is not protecting the environment, but rather lording it over any individual or business that fails to immediately submit to his absolute authority. Under the pretense of protecting the environment, he attacks a private enterprise that has harmed no one, has helped the community, and has created jobs.

Having obtained legal authority to invade the Ghostbusters’ facility, despite the lack of evidence of any crime, Peck discovers what he deems to be a threat to the environment in the Ghostbusters’ ghost storage equipment. Of course, sophisticated equipment that could pose a threat to the environment is ubiquitous in a developed, industrial nation. But thus far in the story, the Ghostbusters have managed their equipment safely and responsibly. They have done so both out of respect for their own safety and the safety of others and because their livelihood would be jeopardized if the ghosts they had captured were to escape and return to re-haunt the premises of their customers.

Despite pleas from the Ghostbusters, the EPA agent shuts off their ghost storage machine and chaos ensues. Remember that up until this point, no environmental disaster had occurred. But by violating the liberty and property rights of the Ghostbusters under the pretense of a false threat to the environment, the government has created a real environmental disaster that now threatens everyone’s lives. In fact, the entire world is now threatened because of this government intervention.

Consider how closely this story recreates the real world, ghosts and goblins notwithstanding. The government’s record on protecting the environment has followed this pattern  since the moment activists got the idea the government could save the world. Among the sparkling achievements of government environmentalism has been the banning of DDT, a safe and effective insecticide that was vilified and ultimately banned because of its supposed threat to the environment. Subsequently, farmers were forced to employ less effective insecticides that really do harm the environment, while a later study showed DDT could actually be eaten by humans over an extended period of time with no adverse health effects.

In another historic blunder, the government decided to employ its ability to coercively override private decisions in order to encourage the production and distribution of ethanol, the fuel additive made from corn. This had the unintended consequence of causing food shortages and skyrocketing prices while failing to significantly affect America’s dependence on fossil fuels. The crowning achievement of this boondoggle was the revelation that the production of ethanol actually consumes more fossil fuel than it produces and is a net positive in carbon emissions. Had property rights been protected, instead of destroyed by the government, none of this would have happened.

Most recently, the government decided it would address two problems at once by “stimulating the economy” with its Cash for Clunkers program. Not only would this supposedly help the economy, but because those trading in their clunkers would have to buy “greener” cars (with other people’s money), it would also help the environment. Of course, the result was perfectly good used cars were destroyed while their owners took out loans for new ones, resulting in a decrease in wealth and an increase in debt for society as whole. In addition, it turned out the owners of the clunkers had previously been limiting their driving due to either concerns about breakdowns or the general lack of pleasure inherent in driving their clunkers. Once provided with new cars by the government, they began driving far more than they previously had, producing more exhaust and consuming more fossil fuels. Another government disaster funded by legal plunder.

As in the movie, every attempt by government to use its coercive power to protect the environment not only fails, but actually creates the very problems it purports to try to solve. In most cases, the problem does not even exist until the government undertakes to solve it. What is the government’s solution? Always it is to attack private property and free enterprise.

It never ceases to amaze me that the American public at large exhibits absolutely no skepticism towards the politically connected segment of the environmental movement. For 100 years, members of a certain political movement claimed private property and free enterprise would destroy society. The 20th century proved them absolutely wrong. Those societies which did away with private property and free enterprise were destroyed themselves, while those which (for the most part) retained property rights flourished. Subsequently, the members of this same political movement suddenly became activists for the environment, studied the problem, and concluded there was only one way to save the earth from environmental disaster: by abolishing private property and free enterprise. Does no one find this conclusion – by these people – an odd coincidence? Does no one even suspect their motives? Are we a nation of fools?

President Obama, please watch the movie. Appoint a “Ghostbusters Czar” to ensure every legislator in the federal government watches it as well. When you have had time to reflect upon its profound message, please declare the environmental war on private property over. If you are looking for wise stewards of the land, you will not find them within the ten square miles you presently inhabit. However, there are some 300 million people who can do a better job just outside of town.

*This article originally appeared on the Campaign for Liberty website.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

>Collectivist Republicans Losing Their Fight

>For eight years, the only reasonable commentary on government policy came from the left. While George W. Bush was president, supporters of the Democratic Party correctly protested the evil war of aggression in Iraq, the abominable use of torture by our military and intelligence agencies, and the sinister aspect of our own government listening to our phone calls, reading our e-mails, and infiltrating our peaceful clubs and organizations as part of the tyrannical War on Terror. Regardless of their motivation, all of these criticisms from the left were valid. The Bush administration, especially while enjoying the support of a Republican majority in Congress, was one of the most damaging administrations to our liberty of any in recent memory.

Of course, these persistent attacks by the Democrats were not really motivated out of a love of liberty. They simply represented a rival gang appealing to the American public’s dissatisfaction with the Bush administration for their own political ends. If anyone doubts this, simply put your ear to the ground and listen for a moment. While the Obama administration marches forward in expanding the War on Terror, fights in court to solidify the government’s right to spy on its own citizens, and has actually confirmed the government’s right to torture under the guise of prohibiting it (as long as said torture is called by another name), all protests from the left against these abominable practices have stopped (kudos to Rachel Maddow and Glen Greenwald who are both notable exceptions).

Since it is apparent that the Democrats are not going to reverse any of these Bush-era incursions against liberty, we can see what President Obama really meant by “change.” While breaking every promise he made to his supporters regarding war, torture, and domestic spying, he has launched an all-out assault on what is left in America of the individual rights to property and free enterprise. His American Recovery and Reinvestment Act handout to existing welfare programs instead of to the “shovel-ready projects” that he claimed the bill would fund, his health care “reform” initiative that will merely attempt to implement programs that have already failed in Europe and Canada, and his destruction of contract law in stiffing secured creditors in the GM bankruptcy are only the beginning.

While all of this might seem gloomy, it should at least represent a political opportunity for the Republicans. Finally, the Republicans have a chance to start making sense and appealing to the natural sense of justice inside each American that was the reason for their political demise in the first place. However, while it might appear on the surface that they are taking advantage of this opportunity, they are not. While railing against what they call Obama’s socialism, they fail to recognize the reason that they will fail in opposing him: their arguments are as collectivist as Obama’s.

Consider their arguments against “Obamacare.” They argue that a government-run program would be inefficient, would eliminate competition through artificially low prices subsidized by tax revenues, and would result in lower quality care and rationing. All of these things are true.

Regarding the government’s takeover of the automobile industry, they argue that the government doesn’t know how to make cars, that forcing the American manufacturers to try to make “greener cars” will only raise their costs and make them less competitive, and that without eliminating the labor union contracts that brought down the American automakers in the first place, they can never compete with foreign automakers, not even those operating in the United States. All of this is true as well.

As just one more example, the Republicans criticize President Obama’s call to expand public works projects, including adding 275,000 jobs under Americorps. They argue that these are not “real jobs,” that once the projects are completed the jobs will go away, and that government cannot create real, sustainable economic growth. Only the private sector can create jobs that last. Again, all true.

While all of these arguments are valid, they are share the same flaw: they are all made based upon what they believe will achieve the best aggregate economic results. Their arguments amount to “the beehive will make more money under our system than theirs.” Like the Democrats, their positions all proceed from the belief that the “needs of society” or the “greater good” outweigh the rights of the individual. If anyone doubts this, then they should take a few moments to read a transcript of John McCain’s acceptance speech upon receiving the Republican nomination for president last year.

The correct argument against all of President Obama’s programs is that they violate the individual rights that government is supposed to protect. Government is an institution of justice, not economics. It exists solely to protect the life, liberty, and property of its constituents. The minute that government attempts to achieve anything beyond this, it must necessarily destroy those rights in the process. As Thomas Jefferson said,

To take from one because it is thought that his own industry and that of his father’s has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association–‘the guarantee to every one of a free exercise of his industry and the fruits acquired by it.”[1]

When government protects life, liberty, and property, enforces the sanctity of contracts, and punishes only violence or fraud, the “free market” that results does produce higher economic productivity and a more equitable distribution of wealth. The beehive does in fact make more honey when the individual rights of the bees are respected. However, when those rights are violated in an attempt to manage the results, the wealth-generating mechanism is destroyed. There is no conflict between individual rights and the needs of society. Securing the rights of every member of society is society’s greatest need.

These are supposed to be the central principles of the Republican Party. Their name itself should be an enormous public relations advantage for them over the Democrats, as our Constitution guarantees us a republican form of government – not a democratic one. Yet what word did we hear from George Bush to describe our nation and its philosophy for all eight years of his presidency? “Democracy.” There is a good reason for that.

Despite their talk about free markets, capitalism, and smaller government, the Republicans have rarely practiced these principles over the past century. The closest they came to fielding a presidential candidate that intended to govern by them was Barry Goldwater, and we the people handed him the most one-sided defeat in American history. After that, Republicans have decided to “talk like libertarians but govern like European social democrats,” as Thomas Dilorenzo so eloquently put it.

After giving the greatest inaugural address of the 20th century (and yes, I am counting John Kennedy’s), Ronald Reagan went on to save Social Security. He had his chance to make a stand and point out that nothing with the word “social” in it was likely to work, besides it being abhorrent to liberty, yet he contradicted everything he said in that wonderful first speech and raised taxes to perpetuate American socialism for another generation. He also ran deficits that exploded the national debt, started the Rex 84 program (the dreaded FEMA camps), and launched the War on Drugs. So much for the “Goldwater Republican.”

George Bush similarly came into office talking about “smaller government,” and “free markets (not to mention his “humble foreign policy”), yet he expanded federal entitlements more than any president since LBJ and cheered on Clinton’s “ownership society,” whereby people who couldn’t afford houses got loans for them anyway because they got to use other people’s money as collateral. Like so many of his Republican predecessors, George Bush’s idea of “free markets” was merely that his friends on Wall Street and in corporate America made as much money as possible, regardless of the fact that they did so because of artificial market conditions created by the Federal Reserve, Fannie Mae/Freddie Mac, and the spider web of regulations that are now written by the very corporations that they are supposed to govern. All of these institutions represent government interference with the free market, fundamentally violating property rights and insulating government-favored corporations from competition. If that is “capitalism,” then Stalin and Mussolini were history’s greatest capitalists.

That brings us to newcomer Sarah Palin. Somehow, she seems to have acquired immunity from criticism of her economic policies despite being the most overt Republican socialist alive. As governor, she put a windfall tax on oil companies operating in Alaska and redistributed their profits to Alaskan citizens. She says that the oil in the ground under Alaska belongs to “the people of Alaska,” instead of to those who risk and spend their own capital to drill for it. When Hugo Chavez did that, it was socialism. When a Republican governor did it, it was “standing up to big oil.”

So, the Republicans are out for now and the Democrats are presently in a position of unchecked power. The minute that they gained the advantage, they began proposing monstrous programs that could truly destroy the last vestiges of our republic. As a result, it is tempting for many to think that the Republicans can be “reformed” or “infiltrated.” Perhaps their decisive defeat has “scared them straight” and will force them to adhere to their supposed principles. One might say to oneself, “At least their rhetoric invokes some of our founding principles. If only we could redirect them while they are rudderless, perhaps we could use their political infrastructure to champion liberty.”

The Democrats have never tried to hide what they are about, least of all during this past election cycle. They sold us socialism and they are going to deliver. We may have to learn the hard way how evil and destructive that system is.

On the other hand, the Republicans have continually sold us free markets, smaller government, individual liberty, and then delivered…socialism. One could make a compelling argument that the misconception that capitalism causes the problems in our mixed economy while socialism provides the solutions is due in large part to people mistaking the economic policies of the Republican Party as “capitalism.” It is not. It is corporatism at best, and fascism at worst – if indeed there is a difference between the two. They combine that with at least as much support for the mammoth entitlement programs as the Democrats. Reagan said that FDR was the U.S. president that he admired most. That really says it all.

The prospect of the present Democratic regime left unchallenged should horrify every sane person with any desire at all to live his own life and have any control over his future. For over a century, our conditioned response in times like these has been to run from one gang of thieves to the other. The Republicans are now on deck, warming up with the familiar big government program of military deficit spending, “compassionate conservative” welfarism, and their hypocritical pandering to the “Chrisitan Coalition.” Four years of misery under the Democrats may be just enough to allow 51 percent of Americans to forget how bad the Bush years really were.

What if this time it were different? Instead of doing the same thing over again and expecting a different result, what if we let the Republicans die? They are gasping for air now, without a viable candidate for president and without a prayer of making up ground in the Congress. Their demise would be nothing unprecedented – political parties have come and gone in America for most of our history. The Federalists, the Whigs, the Democratic-Republicans – all of these put presidents into office but eventually went away. The demise of a political party in the United States is long overdue. Imagine if the libertarian wing of the Republican Party abandoned it, making it impossible for them to gain either the White House or a majority in Congress for the foreseeable future? That would spell the beginning of the end of the bipartisan tyranny that we have lived under for the past century.

There is no danger of an indefinite Democratic reign within our government. President Obama and his Democrats are not just going to fail. They are going to fail spectacularly. Hopefully that will be apparent by the next presidential election. If not, then certainly by 2014 or 2016 it will be obvious to the whole world that Obama’s brand of socialism not only should not continue, but cannot continue. Socialism is unsustainable and America has practiced it for far too long. Its inevitable self-destruction is at hand. The present Democratic platform merely steps on the gas pedal as the vehicle approaches the cliff. We are going over the edge sooner than most people think.

When that happens, there is going to be a political backlash against the Democrats that will make the last Republican defeat look like a split decision. What if at that time there was no Republican Party left to bring in more of the same? Imagine the coalition that might be formed to fill that void. Libertarian Republicans, disenfranchised Democrats who truly supported Obama’s anti-war, anti-torture, anti-spying head fake, and all of those independents that presently vote for the “lesser of two evils” could come together. Who knows who else might come out of the woodwork and vote if there truly were something different on the table?

Only when at least one of these criminal gangs is dismembered will there ever be any “change” in Washington. With the Republicans out of the way and the Democrats completely discredited, the chance for a true revolution in Washington couldn’t be better. You may say I’m a dreamer, but life without Republicans should at least be considered. With the taste of Bush and Cheney fresh on our tongues, what do we have to lose?

[1] Jefferson, Thomas Letter to Joseph Milligan April 6, 1816 (regarding Destutt de Tracy‘s Treatise on Political Economy) from The Writings of Thomas Jefferson, Vol. 14 edited by Albert Ellery Bergh and Andrew A. Lipscomb The Thomas Jefferson Memorial Association 1904 pg. 466

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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The Myth of the Laissez Faire President

P20315-10a.jpgIt is generally accepted that one must wait several decades before looking back at an event or an era with sufficient “historical perspective.” Only from that vantage point can the significance and long-term effects of any piece of history be objectively observed, quantified, and analyzed. However, there is a dilemma inherent in this long-standing tradition. It is that there are always interested parties who wish to characterize significant events or eras in history in a way that suits their own agenda. As a result, by the time sufficient time has passed to satisfy the need for “historical perspective,” these interested parties have created an official story regarding the events in question and have had time to convince the majority of people that this official story is the truth. By the time a generation has passed, the official story has become both accepted history for academia and “conventional wisdom” for average citizens. Regardless of facts, reason, or any perspective whatsoever, the official story now is the truth.

Such has been the case countless time throughout American history. It is universally accepted that America’s Civil War started over slavery, and credits Abraham Lincoln with “freeing the slaves.” History and conventional also wisdom tells us that the quality of life of the working class in America declined during the industrial revolution, and credits the “progressive movement” for instituting needed reforms that saved the working class from capitalism. Most relevant to our situation in America today, history blames the Great Depression of the 1930’s on Herbert Hoover’s “laissez faire capitalism” and “unregulated free markets,” and credits FDR’s New Deal with ending the Depression and restoring prosperity.

When presented in the textbooks of high school history or college survey courses, there is a certain logic and reasonableness to these versions of historical events that makes them very easy to understand and accept. There is only one problem: none of them are true.

Americans are already familiar with the official story of our present crisis. Too much laissez faire capitalism” has resulted in an unprecedented crisis caused by predatory lenders, irresponsible borrowers, speculators, and other market participants acting in an environment with too little regulation. Without oversight, “unregulated free markets” naturally resulted in market players choosing short term profits over long-term prudence. This process was fueled during the past decade by George W. Bush’s “laissez faire policies.”

There is only one problem with this story – none of it is true, either. None of the problems we face today were caused by unregulated free markets and the policies of George W. Bush were in no way “laissez faire.” This is much more than an academic argument. The premise that unregulated capitalism is to blame for our present economic crisis is the basis for every action that our government is taking right now. If that premise is incorrect, then the results of action taken based upon it could be disastrous.

It is probably a good idea at this point to define some terms. Assuming that “laissez faire capitalism” and “free markets” mean the same thing, what I mean when I use those terms is this: a market economy where all exchanges of property are made with the mutual, voluntary consent of all parties to those transactions. While government’s role is limited in such a system, it is nevertheless crucial: to ensure that all transactions are made with the mutual, voluntary consent of all parties. To put it most succinctly, government’s role in a free market is to protect the property rights of each individual.

Is this what George W. Bush did or at least attempted to do? Let us examine the Bush economic policies and see for ourselves.

Bush campaigned on and did follow through upon a promise to cut taxes. He did this by reducing the income tax on the highest income earners and by sending each American family a “refund” of several hundred dollars. One might be tempted to argue that this was a move in the direction of free markets, as the returned money represented reductions of a government that had grown far beyond its role of defending life, liberty, and property. Thus, the tax money collected for these illegitimate functions was a violation of the property rights government was supposed to protect and the tax cuts were a partial remedy for those violations. This is what any self-respecting Republican would have you believe.

There is only one problem: there were no reductions in government. In fact, Bush greatly increased the size of the government with military and new entitlement spending. As a result, he ran huge deficits and doubled the national debt. Looked at objectively, there was a tenuous relationship at best between the money taxpayers had previously paid in taxes and the checks sent out by the government after all of that tax money was already spent. Furthermore, millions of Americans who hadn’t even paid taxes received “refund” checks anyway. Seen for what it was, this “tax refund” was merely a ploy to buy votes with other people’s money dressed up in Republican rhetoric, as well as a way to perpetuate debt-fueled consumerism for the benefit of President Bush’s friends in corporate America. Handing out money to people to whom it doesn’t belong has nothing to do with free markets, whether that money is borrowed from other nations or printed out of thin air. It represents complete distortion of the markets by government, along with a fundamental violation of the property rights of present and future generations.

Amidst this confusion we seem to have forgotten one major contributor to the aforementioned deficits: the Medicare drug plan. The Medicare drug plan was the Bush administration’s program from start to finish, and it was rammed through the legislature despite its dubious administrative plan and complete lack of funding. While it was rightly criticized for both of these faults, no media outlet seems to have recognized its complete antagonism toward free markets. In addition to violating property rights by forcing one group of individuals to pay for the healthcare services of others, Medicare and other government health care programs completely distort the health care market, creating artificial demand that inflates prices and suspends market forces. Here we have another major component of President Bush’s policy that is the complete antithesis of laissez faire capitalism.

The mass illusion about this president’s policies doesn’t stop there. The American public also seems to think that major deregulation occurred under President Bush, but actually the exact opposite is true. It was the Gramm-Leach-Bliley Act (repealing the Glass-Steagall Act) that lead to the massive expansion of derivates in the stock and real estate markets that helped fuel the housing bubble. However, this legislation was actually passed when President Clinton was still in office. In fact, Bush’s only significant effect on the regulatory structure was to increase regulation, not decrease it.

Due to the political fallout from the accounting scandals during the early years of Bush’s presidency, especially the Enron scandal, Bush championed new, completely unnecessary, and profoundly destructive regulations under the Sarbanes-Oxley act. Despite the fact that the accounting scandals were clear cases of fraud, which was already illegal and which could be prosecuted without a single new regulation, President Bush had a political need to show that he was “doing something” about corporate crime.

So, again in complete opposition to “free markets,” Bush signed Sarbanes-Oxley into law, saying as he did so that the bill represented “the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt.”[1] Invoking FDR should have been enough on its own to erase any perception of Bush as a champion of free markets, but the hated “laissez faire” moniker seems to be a tough one to shake. As we now know, the Sarbanes-Oxley Act has been terribly destructive to American markets and has contributed to a migration of new investment away from America and to more business-friendly countries. Chalk up another victory for Bush against free markets.

Finally, there is Bush’s role in the housing bubble, the straw that broke the proverbial camel’s back regarding America’s borrow and spend economy of the past several decades. Here it should be noted that the lion’s share of the blame for this debacle should go to the Federal Reserve System, which kept interest rates artificially low and expanded money and credit to counter what would have been two recessions in the late 1990’s and early 2000’s. Remember, the private Federal Reserve System does not answer to any branch of the federal government. One could certainly argue that both Clinton and Bush merely happened to be in office while the Federal Reserve blew up two massive bubbles during their presidencies (the NASDAQ bubble and the housing bubble).

However, it was not just low interest rates or the expansion of money and credit that caused the housing bubble to inflate. There was also the role of government-sponsored enterprises Fannie Mae and Freddie Mac, which guaranteed mortgages that would not have been written in a free market. Starting with Clinton and continuing with Bush, the executive branch played cheerleader to the “ownership” society whereby every American was entitled to own their own home, whether they could afford the mortgage that went with it or not.

The mortgage debacle is often cited as an example of the “unregulated free market” producing negative results. Since both the “predatory lenders” and the “irresponsible borrowers” were acting voluntarily, the millions of subsequent defaults are characterized as the result of too little regulation on the market, allowing these freely-acting participants to eschew prudence for short-term profits. However, this analysis omits one very important fact: there were not two parties to most of these mortgage transactions, but three.

The forgotten third party was, of course, the taxpayer. It was the taxpayers’ money that was put up as collateral for the loans guaranteed by Fannie Mae and Freddie Mac, and the taxpayer was not acting freely. The taxpayer was forced by government to back these loans without his consent and against his best interests. Had the government not committed this crime against property rights to serve its goal of an “ownership society,” none of the defaulting loans would have been made.

In a truly free market, the desire for profit is balanced by the presence of risk. When one is lending one’s own money, the possibility that the borrower will default forces the lender to adhere to high lending standards to avoid making a bad loan. This is not done out of some civic duty or professional integrity (not that many lenders don’t possess both of these qualities), but out of recognized necessity for economic survival. The balance between desire for profit and risk is a naturally occurring market force when all participants are acting voluntarily in their rational self interest. However, by allowing lenders and borrowers to use other people’s money as collateral, this natural market force was suspended. To go on to call the resulting disaster the result of “unregulated free markets” is nonsense in the first degree.

Ironically, Clinton and Bush each pursued the exact same policy regarding the housing market for very different reasons. Clinton pressured Fannie Mae to take more and more risk in order to play to his base: low-income Americans who would not qualify for a mortgage in a truly free market. Bush went right on encouraging the process in order to appease his base: Wall Street investment houses that were making a killing securitizing mortgages. Regardless of the motivation, what is important to realize is that this policy is completely antithetical to the concept of free markets or laissez faire capitalism.

Of course, once the crisis began, most people recognize that nothing President Bush did could be characterized as “laissez faire.” Bush himself admitted that he was abandoning free market principles because “the market is not functioning properly,” a bizarre statement from one who supposedly believes in free markets in the first place. His massive intervention into the economy and egregious redistribution of wealth are characterized by the media as a departure from his previous “laissez faire approach.” Yet, anyone can see that this “laissez faire approach” was complete fiction. So why do all but a few contrarians keep saying it anyway?
There is an answer to that question. Characterizing Bush’s policies as “laissez faire” does serve a very useful purpose for politicians. It provides them with justification to loot more property and seize more power. The all-out war on free enterprise presently being waged by President Obama and his cohorts in Congress would not be possible if most Americans did not believe the official story that Bush’s presidency was an era of “laissez faire capitalism” or “unregulated free markets” and that these policies caused the economic crisis. Only the continued willingness by the majority of Americans to swallow this economic gibberish allows the destruction of our liberty to march forward.

To my fellow Americans, I say this: No politician (save perhaps one) is going to come forward and tell you the truth. Most of them don’t know the truth, and those that do have figured out that this official nonsense serves their own ambitions, just as saying that the world was flat once served the ambitions of medieval rulers. It is up to you to rub your eyes and look at the world as it really is. Two plus two does not equal five and you know that. Similarly, people voluntarily exchanging their own goods and services with one another can never cause anyone harm and deep down you must know that, too. It is time to reject the idiotic history that is being written about our present difficulties and demand that the evil incursions into our liberty cease immediately. You have enormous power when you know what to demand. It all starts with recognizing the obvious despite the well-funded efforts of those who wish to deceive you. As the good book saith, the truth shall set you free.[2]

[1] Bumiller, Elisabeth (2002-07-31). “Bush Signs Bill Aimed at Fraud in Corporations“. The New York Times
[2] John 8:32

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.