Eliot
Spitzer's Outrageous Attack on Libertarianism
by
Robert Wenzel
Economic
Policy Journal
Recently
by Robert Wenzel: The
Advancing Totalitarian Medical State Means It's Time for Young Doctors
to Leave the U.S.
Eliot
Spitzer is out with a new book, Government's
Place in the Market.
It's a tiny
book, only 83 pages and Spitzer writes only 59 of the pages. The
remaining pages are critiques of Spitzer's comments by Dean Baker
and Robert Johnson. The book does need critiquing.
Spitzer's commentary
is simply not in touch with reality. On the first page of the introduction,
Spitzer writes that we have forgotten what we had learned from the
crisis. What did we forget?
...in the
immediate aftermath of the bankruptcy of the entire financial
system, there was a consensus that the libertarianism that had
dominated Washington for 30 years was an abject failure. (p.4)
Say what? Thirty
years of libertarianism? A period when the United States central
bank, the Federal Reserve, boosted the money supply from $1.6 trillion
to $7.7 trillion. A period during which it became near impossible
to start a brokerage firm to compete against the banksters, without
spending literally millions to pass through all the regulatory hurdles.
A period during which government attempts to regulate every nook
and cranny of our lives exploded. This Spitzer tells us was a period
of libertarianism.
Spitzer contrasts
this "libertarian" period with some earlier period where
a:
balanced
approach was what had worked during the periods of our nation's
greatest prosperity... (p.5)
What the hell
is he talking about? Spitzer's "libertarian period" is
the most regulated period in the history of the United Sates. There
was no earlier "balanced approach" that fostered "our
nation's greatest prosperity." This is just fiction.
In Chapter
1, Spitzer writes relative to his theme of 30 years of libertarianism:
For 30 years
a libertarian leadership dominated leadership circles, beginning
politically with President Ronald Reagan...(p.16)
Ha! Murray
Rothbard in 1989 warned
us about these Spitzer-type build ups of the myth of the libertarian
Reagan:
Eight years,
eight dreary, miserable, mind-numbing years, the years of the
Age of Reagan, are at long last coming to an end. These years
have surely left an ominous legacy for the future: we shall undoubtedly
suffer from the after-shocks of Reaganism for years to come...
There was
no "Reagan Revolution." Any "revolution" in
the direction of liberty (in Ronnie’s words "to get
government off our backs") would reduce the total
level of government spending. And that means reduce in absolute
terms, not as proportion of the gross national product,
or corrected for inflation, or anything else. There is no divine
commandment that the federal government must always be at least
as great a proportion of the national product as it was in 1980.
If the government was a monstrous swollen Leviathan in 1980, as
libertarians were surely convinced, as the inchoate American masses
were apparently convinced and as Reagan and his cadre claimed
to believe, then cutting government spending was in order. At
the very least, federal government spending should have been frozen,
in absolute terms, so that the rest of the economy would be allowed
to grow in contrast. Instead, Ronald Reagan cut nothing, even
in the heady first year, 1981...
The much-heralded
1981 tax cut was more than offset by two tax increases that year.
One was "bracket creep," by which just inflation wafted
people into higher tax brackets, so that with the same real income
(in terms of purchasing power) people found themselves paying
a higher proportion of their income in taxes, even though the
official tax rate went down. The other was the usual whopping
increase in Social Security taxes which, however, don’t count,
in the perverse semantics of our time, as "taxes"; they
are only "insurance premiums." In the ensuing years
the Reagan Administration has constantly raised taxes – to
punish us for the fake tax cut of 1981 – beginning in 1982
with the largest single tax increase in American history, costing
taxpayers $100 billion.
Creative
semantics is the way in which Ronnie was able to keep his pledge
never to raise taxes while raising them all the time...
How about
deregulation? Didn’t Ronnie at least deregulate the regulation-ridden
economy inherited from the evil Carter? Just the opposite. The
outstanding measures of deregulation were all passed by the Carter
Administration, and, as is typical of that luckless President,
the deregulation was phased in to take effect during the early
Reagan years, so that the Gipper could claim the credit.Such was
the story with oil and gas deregulation (which the Gipper did
advance from September to January of 1981); airline deregulation
and the actual abolition of the Civil Aeronautics Board, and deregulation
of trucking. That was it.
The Gipper
deregulated nothing, abolished nothing. Instead of keeping his
pledge to abolish the Departments of Energy and Education, he
strengthened them, and even wound up his years in office adding
a new Cabinet post, the Secretary of Veterans Affairs. Overall,
the quantity and degree of government regulation of the economy
was greatly increased and intensified during the Reagan years.
The hated OSHA, the scourge of small business and at the time
the second most-hated agency of federal government (surely you
need not ask which is the first most-hated), was not only not
abolished; it too was strengthened and reinforced. Environmentalist
restrictions were greatly accelerated, especially after the heady
early years when selling off some public lands was briefly mentioned,
and the proponents of actually using and developing locked-up
government resources (James Watt, Anne Burford, Rita Lavelle)
were disgraced and sent packing as a warning to any future "anti-environmentalists."
The Reagan
Administration, supposedly the champion of free trade, has been
the most protectionist in American history, raising tariffs, imposing
import quotas, and – as another neat bit of creative semantics
– twisting the arms of the Japanese to impose "voluntary"
export quotas on automobiles and microchips. It has made the farm
program the most abysmal of this century: boosting price supports
and production quotas, and paying many more billions of taxpayer
money to farmers so that they can produce less and raise prices
to consumers.
And we should
never forget a disastrous and despotic program that has received
unanimous support from the media and from the envious American
public: the massive witch hunt and reign of terror against the
victimless non-crime of "insider trading." In a country
where real criminals – muggers, rapists, and "inside"
thieves – are allowed to run rampant, massive resources and
publicity are directed toward outlawing the use of one’s
superior knowledge and insight in order to make profits on the
market...
Foreign
aid, a vast racket by which American taxpayers are mulcted in
order to subsidize American export firms and foreign governments
(mostly dictatorships), has been vastly expanded under Reagan.
The Administration also encouraged the nation’s banks to
inflate and pour money down Third World rat-holes; then bailed
out the banks and tin-pot socialist dictatorships at the expense
of U.S. taxpayers (via tax increases) and consumers (via inflation)...
I am convinced
that the historic function of Ronald Reagan was to co-opt, eviscerate
and ultimately destroy the substantial wave of anti-governmental,
and quasi-libertarian, sentiment that erupted in the U.S. during
the 1970s.
Yes, Rothbard
knew, way back, that the interventionist Reagan would be the strawman
libertarian for those like Spitzer to use as an example of supposed
libertarianism that has failed us. Although, it would probably be
difficult for even Rothbard to imagine the degree to which Spitzer
would stretch the concept.
Read
the rest of the article
July
18, 2011
©2011
Economic Policy Journal
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