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The free-market state as predator

Suddenly planning, standards, regulation and progressive taxes don't seem so bad.

Author James K. Galbraithby James Galbraith, The Progressive Economics Forum

Years ago, I realized that the free-market, supply-side crowd, true conservatives who'd ridden high with Reagan, dislike Bush as much as I do. I speak of the hard money, low-tax, Wall Street Journal, deregulate-and-privatize team, the nemeses of my youth, people like Bruce Bartlett, Paul Craig Roberts, the late Jude Wanniski. Suddenly, we were on the same side. Had I gone crazy or had they gone sane?

Whether it was right or wrong, "Reaganomics" had a logic. Each policy would aim at one problem. Tight money would cure inflation. Low taxes would stimulate saving and work effort. Small government would "crowd in" investment. Free trade would make us efficient. Smart people believed this and they had the authority of respected economists like Milton Friedman and Friedrich von Hayek to back them up.

But now those ideas are dead, buried, abandoned. Deregulation brought us miseries in finance, transport, energy and the climate. Free trade agreements dole out favors to big farmers and big pharma. The financial crisis finished off what was left of monetarism, the idea that the Fed should only worry about inflation. And everyone has given up on waiting for low taxes to unleash the creativity of the ultra rich. . .

James K. Galbraith is a progressive American economist who writes frequently for mainstream and liberal publications on economic topics.

Links and sources
  Galbraith's Predator State, by James Galbraith, The Progressive Economics Forum, August 8, 2008

Posted: August 14, 2008

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