Wednesday, October 13, 2010

I'm being oppressed

Ever since I can remember, companies that disliked having to obey environmental, safety, and truth in advertising laws, and wealthy individuals who disliked paying taxes on their inheritances and unearned incomes, have found it helpful to express their dislikes as courageous stands for liberty and individual rights against the tyrannical oppression of the state. Washington think tanks supported by corporations and rich guys, such as the Cato Institute, the Heritage Foundation, and the Competitive Enterprise Institute, have been working for decades to give this traditional agenda of corporations and rich guys an intellectual gloss of libertarian philosophy.

But it's always been just about money. When pressed for specific examples of government oppressiveness that is interfering with liberty, prosperity, and entrepreneurial innovation, they either start mumbling about "excess paperwork requirements" or retreat into Reaganesque panegyrics to free enterprise.

Even people who should know better have bought into the portrait of Ronald Reagan as a latter-day Tom Paine who struck a blow for liberty by unleashing American competitiveness and innovation from the oppressions of burdensome government restrictions. But in fact all Reagan really did to the political economy was to accelerate the massive transfer of income from labor to capital and from the middle class to the wealthy that has marked the last three decades, and to institutionalize the Republican Party's intellectual disconnect between rhetoric and reality on balanced budgets. And as for American private prosperity as a whole, the Bill Clinton years (which gave us a budget surplus along with higher taxes that — had they not been promptly dismantled by W. — would have placed us on a course to pay off the entire Federal debt and also place Social Security on a sound footing) were marked by a faster and more sustained growth in U.S. GDP than any other period in modern history, including the Reagan era; for the record here is a chart (click to enlarge) using the official data from the Bureau of Economic Analysis:

Real U.S. GDP (billions of 2005 dollars)