Market Capitalism May Have the Flu, but Socialism Has Pneumonia
"We Are All Socialists Now"
So proclaimed Newsweek magazine in its brazen February 7, 2009 cover story.
That headline constitutes wishful thinking more than it does objective reporting by the notoriously left-leaning Newsweek. It symbolizes, however, the eagerness on the part of liberals to leverage the current economic downturn toward seismic economic and ideological reorganization in America.
After all, consider new White House Chief of Staff Rahm Emanuel’s ominous comment that “you never want a serious crisis to go to waste – and what I mean by that is an opportunity to do things that you didn’t think you could do before... This crisis provides the opportunity for us to do things that you could not do before.”
Like Emanuel and Newsweek, ideologues across America and the world who advocate expanded control over almost every aspect of American life – taxes, energy, healthcare and education were among those explicitly listed by Emanuel – consider this recession the perfect opportunity to scapegoat “deregulation” and demand suffocating increases in governmental power.
Of course, those who seek to scapegoat “deregulation” and market capitalism ignore the fact that our economic troubles stem primarily from the home mortgage industry, which is one of the most regulated, rather than deregulated, areas of the economy. They also ignore such examples as Bernard Madoff escaping no fewer than eight Securities Exchange Commission examinations without corrective action. Turning a blind eye to such examples, they react to governmental regulatory failures by calling for – you guessed it – more government regulation.
Despite these inconvenient truths, advocates of greater governmental dominion contend that the more socialist economies of Western Europe provide a better, more stable model than American capitalism.
Unfortunately for them, the latest objective numbers establish the opposite.
Just this week, the euro-zone economies posted their worst economic quarter in over thirty years. In the fourth quarter of 2008, their collective gross domestic product (GDP) contracted at a startling 6% annual rate, led by famously socialist Germany, France and Italy. By way of comparison, the supposedly “catastrophic” American economy, which was larger than the European economies to begin with, contracted at a 3.8% annual rate in the fourth quarter. That constitutes an unhealthy quarter, to be sure, but the euro-zone decline was over 50% worse.
In addition to worse GDP numbers, euro-zone unemployment reached 8% as of January 30, almost a full point higher than the American unemployment rate for the same time period.
The numbers in Japan, which has for over a decade pursued the very type of massive redistributive “stimulus” programs that liberals claim will improve the American economy, tell an even more dismal story. This week, the Japanese Economy Ministry announced that its economy contracted at a 12.7% annualized rate during the fourth quarter of 2008. Worse, economists predict another double-digit decline for the current quarter.
Other socialist nations such as Venezuela tell a similar story of decline. Even in Russia, where Prime Minister Vladimir Putin and President Dmitry Medvedev once enjoyed stratospheric popularity, opinion polls are showing a substantial decline in public approval ratings.
If advocates of socialism and radical restructuring of the American economy were correct, Europe and Japan would presumably be outperforming America. Instead, the opposite is true.
Accordingly, free-market advocates should be turning Emanuel’s quote on its head, and citing Europe’s meltdown as the type of crisis that justifies fundamental re-thinking of its socialist policies.
It’s easy, of course, for liberals to criticize free-market capitalism and point out its flaws. After all, nothing on Earth, and certainly no human-created economic system, is flawless. But the operative question is not whether the free market is perfect, but rather “compared to what?”
To paraphrase Winston Churchill’s comment about democracy, capitalism is the worst economic system in the world – except for all those others that have been tried. The American economy may have a case of the flu, but our socialist counterparts across the world are suffering from pneumonia.
Once again, this week’s numbers prove it.February 19, 2009