"The government is like a baby's alimentary canal, with a happy appetite at one end and no responsibility at the other." Very few leaders have had Ronald Reagan's courage to examine so honestly the wastefulness of government. Even fewer have had the courage to combat a recession by lifting the burden of bureaucracy off the back of their people and accepting the political costs of squeezing inflation out of the economy. And he did it while fighting the most important war in the history of the West.
At the dawn of industrial capitalism, Adam Smith saw how men cooperate in the market without political coercion. He described the force leading people to promote each other's interests as an "invisible hand." Reagan embraced the principles of Smith, Hayek, and Friedman. The big difference between him and other Republicans is that he often acted upon his beliefs. Reagan forced the economy into much needed but painful withdrawal from state control. He let the invisible hand do its job, and America entered a period of unprecedented economic expansion.
In our post-industrial, post-Cold-War, post-9/11 society, the interventionist colleagues of Smith and Reagan labor under the conviction that capitalism has turned senile. The diagnosis: The invisible hand suffers from a chronic ailment known as rheumatoid arthritis. Symptoms include fatigue, fever, aches, stiffness, and loss of appetite.
The market's immune system malfunctions, threatening to trap the economy at a point way below its productive potential. Keynesians believe that the painful flares result from capitalism's genetic predisposition to a cycle of irrational booms and under-consumption busts, a fatal ideological concession to the fundamentals of Marxist economics.
Obviously there is no cure for capitalism, but some promise that they could manage the symptoms. In his presidential address at the Eastern Economics Association conference, Nobel-winning economist Joseph Stiglitz scolded the American consumer for being fiscally irresponsible. And then went on and on for more than an hour explaining how the government needs to spend several trillion of our money on programs to clean up the mess.
Excuse me? If it is morally unacceptable and economically unsustainable for an individual to spend more than 100 percent of his income, how much sense does it make for 300 million individuals to do so collectively through their government? The only response that my distinguished colleague was able to give was that he hoped for the process of government expansion to be reversed as soon as the crisis was over.
Really? When was the last time that we allowed the government to grow and saw it shrink back to a less oppressive size on its own? And if capitalism is such a mess, why do we need to mortgage the future of our children to save it? Why not go all the way to the Marxist camp?