FREE MARKET FANTASIES

From the New York Times, Princeton economist Paul Krugman on how deregulation came to be considered a good thing:

Bad Cow Disease

Thus, when Grover Norquist, the anti-tax advocate, was asked about his ultimate goal, he replied that he wanted a restoration of the way America was “up until Teddy Roosevelt, when the socialists took over. The income tax, the death tax, regulation, all that.”

The late Milton Friedman agreed, calling for the abolition of the Food and Drug Administration. It was unnecessary, he argued: private companies would avoid taking risks with public health to safeguard their reputations and to avoid damaging class-action lawsuits. (Friedman, unlike almost every other conservative I can think of, viewed lawyers as the guardians of free-market capitalism.)

Such hard-core opponents of regulation were once part of the political fringe, but with the rise of modern movement conservatism they moved into the corridors of power. They never had enough votes to abolish the F.D.A. or eliminate meat inspections, but they could and did set about making the agencies charged with ensuring food safety ineffective.

They did this in part by simply denying these agencies enough resources to do the job. For example, the work of the F.D.A. has become vastly more complex over time thanks to the combination of scientific advances and globalization. Yet the agency has a substantially smaller work force now than it did in 1994, the year Republicans took over Congress.

Perhaps even more important, however, was the systematic appointment of foxes to guard henhouses.

Click here for the rest.

The point Krugman goes on to make, and it's quite a good one, is that, in the end, a great deal of this deregulation mania has come back to bite US business on the ass--Korea's current boycott of American beef comes from reasonable fears that the US does far too little to guard against mad cow disease.

The point I want to make, however, is that I'm not full of shit when I go on and on, again and again, about how conservative philosophy, which is probably too kind of a word to use, concerning the government's role in the economy, is responsible for many of the consumer safety stories we've seen in the headlines so often these last few years. That is, conservatives believe the less government interference in the economy, the better it is for everybody; "get the government off the people's backs" sounds really nice, but without Big Government protecting us from inhuman Big Business, we're all fucked. Poison cat food, lead paint and date rape drugs in toys from China, tainted spinach and tomatoes, E. coli hamburgers, all this stuff should have been caught by government regulation agencies before it injured a single American citizen. But these agencies now represent the interests of the industries who think nothing of harming their customers. All because of the ascendancy of right-wing economic philosophy.

Same thing goes for the California energy crisis of 2000-2001. Ditto for Enron and Worldcom. Same for the subprime mortgage crisis. And on and on.

If we're going to allow massive corporations to have great power over our lives in this way, we simply must have a government that is strong enough to play the policeman. On the other hand, that makes it all the more vital to keep these vast concentrations of wealth away from the levers of governance--all they ever do is fuck it all up.

At any rate, I've got a mainstream bigtime economist here who says I'm right.

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