by Bill Martel
We are in a recession, global markets are suffering, markets are down 35 percent, unemployment is 6.7 percent, and General Motors and Chrysler are bankrupt.
With talk of $1 trillion government bailouts, it is all the rage to blame our economic crisis on capitalism and propose greater government regulation. Our economy thrives because government interference is minimal, but recent events have led some pundits to challenge this basic idea.
Our economic troubles encourage some to blame, without challenge, capitalism and free markets.
No conclusion could be more fundamentally wrong, farther from the truth, or inflict greater harm on our economy, standard of living, and freedom.
In fact, today’s economic crisis was caused by neither capitalism nor free markets – but by failed government regulation of sub-prime real estate mortgages.
Since the 1990s, Washington policymakers forced banks to make high-risk loans. Today’s economic crisis occurred from government regulation of sub-prime real estate mortgages. The culprit is not capitalism and free markets but failed government policies.
Our capitalist, free-market economy is so productive and strong precisely because it generates more jobs, innovation, and freedom.
We lead the world in economic growth, job creation, higher incomes, and productivity because capitalism and free markets encourage individuals and firms, large and small, to create jobs and wealth. Small businesses produce most jobs in the U.S., accounting for three quarters of jobs in New Hampshire.
The only “alternative” to capitalism and free markets is more government regulation, but that created today’s crisis. Do you really want more government regulation, which predictably will harm our economy and reduce our standard of living?
Societies in Europe regulate their economies vastly more than we do, and predictably have fewer jobs, smaller economies, and lower standards of living.
As we struggle with the fallout from Washington’s disastrously failed policy of regulating sub-prime mortgages, keep two rules in mind.
Rule One: we owe our prosperity to capitalism and free markets, these always lead to economic recovery, and the culprit is government regulation.
Rule Two: When in doubt, refer to Rule One.
Be afraid, be very afraid, when critics blame capitalism. What they want is greater government control of our economy and our lives.
To protect the world’s most productive economy and our standard of living, we need free markets – not inept government regulation.