Freedom versus Paternalism in the Coming Decade

We are not only standing at the beginning of a new year in 2021, but at the entrance of the third decade of the 21^st century. With a fifth of this latest century now behind us, what have we learned so far? I, personally, fear that the answer to that is little that is right and true, as I understand it as a classical liberal and a supporter of a free market order of things, given all that has happened over the last 20 years.

Let us recall some aspects of our world two decades ago in 2000. First, for much of the 1990s, in spite of the scandals surrounding the Bill Clinton Administration – “I did not have sex with that woman” – many were fairly optimistic about the future in America. The Soviet Union had disappeared from the face of the global political map at the end of 1991, China was, seemingly, moving in the direction of greater economic freedoms, and the Eastern European countries were no longer “captive nations” behind the communist Iron Curtain. America was the leader, it appeared, of a unipolar world with an end to the decades-long Cold War.

1990s Budget Surpluses, Y2K Computer Fears, and Florida Hanging Chads

Due to “divided government,” with a Democratic president in the White House and a Republican-held Congress for six of Clinton’s eight years in office, the federal government had seen four years of budget surpluses. Keynesian-oriented and other fiscal “activist” economic policy analysts worried about a future in which Uncle Sam might end up paying off the entire federal debt; after all, it “only” came to around $5 trillion when Clinton left office in January 2001. If there was no more outstanding government debt in the financial markets, what would the Federal Reserve have to buy and sell in its attempts to determine the quantity of money in the banking system and for manipulating at least short-term interest rates? Oh, no, an “end” to Keynesian-inspired fiscal and monetary policy? Say it isn’t so.

People had approached the New Millennium a bit fearful of the Y2K threat: what if all the banking and other computer systems at the heart of the financial networks connecting everything in the economy could not handle going from 1999 to 2000 at the stroke of midnight on December 31^st? The Fed had pumped in additional “liquidity” just to make sure everyone might have sufficient cash on hand if a computer Armageddon befell humanity. We all woke up on January 1, 2000, and all was financially at peace in the world. It was a close one, but mankind lucked out, again.

But 2000 ended and 2001 began with a deeply divided country due to the presidential election between Republican George W. Bush and Democrat Al Gore. The fate of the outcome had all come down to a relatively small handful of votes in Florida that were in dispute due to the “hanging chads;” that is, the determination of how and for whom voters had manually punched the voting cards in the voting booths in Florida. It fell to the U.S. Supreme Court to make a decision that handed the presidency to George W. Bush.

Trade Tower Terrorism, Foreign Wars, and the Financial-Housing Crisis

For the first nine months of 2001, a large percentage of those who voted for Al Gore considered Bush to be an illegitimate president, since the national popular vote had gone for Gore, while the Supreme Court outcome gave George Bush the needed Electoral College votes to put him in the White House. Then a “miracle” happened for President Bush – the terrorist attacks on the New York City Twin Trade Towers and the Pentagon in Washington, D.C on September 11, 2001. Overnight, an imposter president became the patriotic Commander-in-Chief standing in lower Manhattan at the remains of the towers brought down by two of the commercial airplanes hijacked by the terrorists.

Less than a month after the 9/11 tragedy, on October 7, 2001, Bush ordered an invasion of Afghanistan, when the Taliban religious tyrants ruling that country would not meet U.S. demands, including a handing over of those Al-Qaeda members accused of planning and ordering the attacks on America. This began the longest war in United States history that almost 20 years later still has not fully come to an end. (See my article, “Warnings and Lessons 15 Years After 9/11 and the Afghan Invasion”.)

Determined to make more of the Middle East over into an American image, the Bush Administration ordered the invasion of Iraq in March 2003 under the pretense of the Iraqi dictator, Saddam Hussein, storing “weapons of mass destruction,” which were found to be nonexistent when the country had been fully occupied by U.S. forces and those of a few other countries dubbed “the coalition of the willing.”

Between 2001 and 2019, it is estimated that these wars cost the American taxpayer over $6.4 trillion. In the two conflicts, the U.S. has suffered around 8,000 dead and over 52,000 wounded American military personnel.

Because of military-related and domestic spending, the national debt grew from about $5 trillion when Bush took office to around $10 trillion when his presidency was over at the end of his second term in January 2009. His last year in office also saw the start of the financial and housing crises of 2008-2009, which were the result of a five-year monetary expansion binge by the Federal Reserve and the irresponsibility of the government housing agencies, Fannie Mae and Freddie Mac. Not the “excesses” of an “unbridled” capitalism, but monetary manipulation and housing-market interventionism caused the downturn and its magnitude, including the “shotgun wedding” between the banking industry and the U.S. Treasury in the autumn of 2008 that gave the government part ownership of the banking sector. I say a “shotgun wedding” because several banks did not want the government’s infusion of capital but were forced to take it. (See my article, “Ten Years On: Recession, Recovery, and the Regulatory State”.)

The “Hope and Change” of More Political Paternalism

The next eight years of the Barack Obama presidency doubled the national debt to over $20 trillion when he left office in January 2017. Not only did those wars in the Middle East continue, but drone attacks on other countries in that part of the world were intensified, with little regard to civilian deaths in the process. And the U.S. supported members of the European Union in helping to overthrow the Libyan government of dictator Muammar Gaddafi in 2011, which has plunged that country into almost 10 years of tribal civil war and destruction.

The domestic “crowning achievement” of the Obama administration was the (un)Affordable Care Act – ObamaCare – that further socialized government oversight and funding and control of the health care and medical insurance industry. It was rolled out with lies and misinformation about keeping your own doctor and insurance if you wanted to, that it would cost less and give more, and had a disaster of an initial online enrollment. House Speaker Nancy Pelosi pushed it under the argument that we could not be sure what was in the Act or how it might work until it was passed and implemented. Clearly the “politically correct” redefinition of the meaning of transparency in legislation. (See my articles, “For Healthcare, the Best Government Plan is No Plan” and “ObamaCare: Will America’s Health Care Future Follow Germany’s Past?”.)

Hailed initially as the great redeemer for “hope and change,” Obama disappointed and frustrated many, including those on the politically “progressive left,” who accused him of being too much of a “moderate,” unwilling to push a far more radical agenda. However, for those not enthralled with the dream and desire for a far more paternalistically planned society, Obama was more than enough of an interventionist and welfare statist. There were few corners of society that he did not think could and should be socially engineered in some way by those in political command and control. He assured the country that he had a pen and a phone, and if Congress would not always give him what he wanted, well, he had the power of arbitrarily instituting executive orders. In addition,Obama praised and called for learning “positive” lessons from the socialist experiment in Cuba, but without the somewhat disagreeable dictatorship thing. (See my articles, “Mr. President, Please Mind Your Own Business” and “Barack Obama and the Meaning of Socialism” and “Presidential Hubris in the State of the Union Address” and “Obama’s ‘Middle Way’ Between Capitalism and Socialism Means Less Liberty”.)

The Loving or the Hating of Donald Trump

The contest for the White House in 2016 between Hillary Clinton and Donald Trump was between two products of the corrupt interventionist-welfare state: Hillary as the political intriguer and insider manipulator, and Donald as the master of the TV reality show, the carnival huckster and political player who made money by knowing how to game the interventionist and regulatory system.

Like with George W. Bush, many in the Democratic Party and the “progressive” movement refused to accept and view Trump as a legitimate president; Hillary had won more of the popular vote while losing that “undemocratic” Electoral College vote, with the only way to explain “him” winning was to assume that Russian hackers had somehow twisted and “fixed” the outcome. (See my articles, “Government Interventionism Created Hillary Clinton and Donald Trump” and “Donald Trump the Corrupt Creation of America’s Bankrupt Politics” and “Donald and Hillary in Plunderland”.)

The Trump Administration will be a unique one in the American history books. It would be necessary to go really way back to find a president hated or hailed with such intensity as Donald Trump. For Democrats, “Progressives,” or “democratic” socialists, he has conjured up images of a fascist takeover, a rebirth of Jim Crow, and an essential corruptness of the “capitalist” system. To many Republicans, Trump has been the savior of the country from “political correctness,” who won’t take BS from “the left.” Who wanted to make America great again, by not putting up with deadbeat Europeans and conspiring Chinese commies.

If Not for Covid-19, Trump Might Have Won

In fact, Trump has been a crude, rude, boorish economic nationalist and neo-Mercantilist, who was as unwilling to challenge or undermine the welfare state entitlement programs as any Democrat or “Progressive.” This helps explain why it is that under Trump’s presidential watch, the national debt after his four years in office has increased to over $27.5 trillion.

Trump has not been America’s version of Adolf Hitler, in spite of what “the left” has imagined, but he has had a brutish, bullying persona toward anyone or anything that did not conform and consent to his whims and wishes. Anyone not reflecting his views has been labelled a “loser.” His continuing unwillingness to accept that Joe Biden will be president starting on January 20, 2021 is just the latest demonstration of his flight from reality with anything that differs from his own view of the world. (See my articles, “The Economic Nationalism of Donald Trump” and “The Zero-Sum World of Donald Trump” and “Donald Trump as Carnival Hawker and His Leftist Enemies” and “Trump’s Economic Warfare Targets Innocent Bystanders” and “Presidential Hubris: ‘Let Me Run the Country’” and “The Imperial Presidency Embodies Political and Economic Hubris” and “The U.S. Revives the Personal State”.)

In spite of who and what he is, Trump very likely would have won reelection, if the coronavirus had not happened, and if his administration and the state governments had not locked down the society and coercively attempted to restrictively plan production, work, and consumer shopping of so much of the American economy beginning in March of 2020. But his own policy follies and those of state governors created the economic and financial hardships that virtually assured his losing the election, given the general dislike of him among so many voters around the country.

Misguided “Science” and Irrational Government Planning

The year 2020 demonstrated very clearly, unfortunately, the embeddedness of political paternalism in American society, in terms of both the arrogant presumption of those in government to impose nearly a comprehensive restrictive command and control system over the country, and the willingness of so many Americans to passively and obediently follow those in power down a road to economic disruption and destruction as long as politicians and government “experts” chanted the phrase “follow the science.”

The “science” has been found to be faulty and full of exaggerations and factual errors that have ruined the livelihoods and everyday lives of tens of millions of people. Shunted aside were any notions of “costs,” or “trade-offs” in the economic sense and meaning of these things. In the 20^th century’s central planning tradition, a one-size-fits-all response was imposed on people, and with all the usual irrationality and arbitrariness seen in the actual centrally planned societies of the last century. The irrationality and arbitrariness were seen in the fact that different state governments, all claiming to be following the same “science,” implemented patterns of shutdowns and lockdowns and restrictions on retail business different from the others, but often with the same inconsistent results in terms of Covid-19 cases and reported deaths.

The U.S. economy has been put through a whipsaw reflected in real Gross Domestic Product plunging 31.4 percent in the second quarter of 2020, and springing back up 33.4 percent in the year’s third quarter as soon as the shutdowns and lockdowns and shopping restrictions began to be lifted or at least loosened in different parts of the country. But in between this GDP rollercoaster have been bankrupt businesses, eaten up life savings, permanent losses of employment, and the disruption of education from kindergarten to graduate school, along with breaks in or hurdles placed in the way of the global supply chains of production and output. (See my articles, “To Kill Markets is the Worse Possible Plan” and “Leaving People Alone is the Best Way to Beat the Coronavirus” and “There Will be No Recovery Without Production” and “How Lockdowns Shattered the Structure of Production” and “Government Policies Have Worsened the Coronavirus Crisis” and “Lockdowns as a Political Tragedy of the Commons”.)

The Counterrevolution of Identity Politics and Cancel Culture

Overlaid on all of this that happened in 2020 has been a counterrevolution of tribal collectivism dramatically seen with violent and destructive demonstrations and riots following the tragic and indefensible killing of George Floyd in May of 2020 from being strangled under the knee of a policeman on his neck in Minneapolis. The legitimate challenges to police procedures and disregard of human life in the face of a victim who is pleading that he cannot breathe as he expires became the catalyst for an onslaught of “identity politics” and “cancel culture” that has been festering in the interstices of academia for decades.

This was not a mere call for reforms in policing methods and greater everyday sensitivity to racial and ethnic biases by law enforcement. No, this is a full-on counterrevolution against the American, and indeed, modern Western world, foundations in philosophical and political individualism, the premises of economic liberty, private property rights, and free enterprise, and the institution of constitutionally limited government based on impartial rule of law.

It represents a perverse and dangerous mixture of Marxian class analysis with Nazi-like racialism. Individuals as distinct and unique thinking, valuing, and acting human beings, we are told, do not exist. Individuals are defined by and determined in their place and prospects in society by their race, their gender, and their “class” status and position in the social order. All the talk about individual rights, rule of law, freedom of association inside and outside the marketplace are ruses, coverups, corrupt and exploitive devices for a ruling class of white, male heterosexuals to dominate and oppress the rest of mankind through the political and institutional mechanisms of selfish, profit-oriented “capitalism.”

“America” is just another name for racism and sexism from its beginnings, it is insisted, that can only be “cured” by a root and branch removal of the words, symbols, institutions, and politics of the entire United States. In its place must be a society in which “diversity” and “inclusiveness” is assured by politically established and enforced “by-the-numbers” quotas of race, gender and class groups, for every profession, occupation, and role in society, into which each and every real individual would be classified. This would determine everyone’s fate, not as an actual, free human being, but as the member of a tribal group, with the “shares” determined and divided among these groups by those claiming the political authority and power to speak for all those in one or more of those collectivist pigeonholes. (See my articles, “The New Totalitarians” and “Tragedies of Our Time: Pandemic, Planning and Racial Politics” and “Save America from Cancel Culture” and “’Systemic Racism’ Theory is the New Political Tribalism” and “Self-Censorship and Despotism Over the Mind”.)

New Decade Opens with Renewed Push for Paternalism and Plunder

The United States starts this third decade of the 21^st century with a new Democratic Administration coming into the White House and possibly dominating Congress, depending upon two Senatorial runoff elections in Georgia. But whether there is a Democratic-controlled federal government or a divided government with the Republicans holding a slim majority in the Senate, the worst of the collectivist fads and fashions will be pushed over the coming years. Climate change-based controls and centralized planning will be pushed aggressively; demands will be made for more regulation of business in the name of “social justice” and corporate “social responsibility;” calls will be made for increased taxes on “the rich” and not so rich to cover more of the redistributive plunder games that are the mother’s milk of political power and privilege; race and gender warfare will be ratcheted up on college campuses, corporate boardrooms, and the shop floors of private enterprises, great and small. (See my articles, “Biden’s ‘Passion and Purpose’ is More Political Paternalism” and “Milton Friedman and the New Attack on Freedom to Choose” and “Stakeholder Fascism Means More Loss of Liberty”.)

The political air is likely to be even more ideologically polluted with every imaginable economic fallacy. Renewed calls for raising the national minimum wage to $15 or more an hour; increased “free lunches” through more government deficit spending; disregard for savings and investment as the keystones to economic and social betterment in the future by demands for higher taxes on income and wealth; insistence that government experts and agencies have the knowledge, wisdom and ability to plan the right and desirable patterns of capital investment for energy, infrastructure, the location and type of businesses, and the education and employment of the workforce based on race and gender social justice.

In other words, there appears to be a groundswell of economic ignorance and stupidity facing us, and even more than usual. What this means for friends of freedom and practitioners of sound, free market economics, however, is a need to redouble our efforts, and not wallow in despair and disappointment. Bad policies inescapably bring about undesirable and counterproductive effects. But their very failures can serve as openings to more reasonable and rational policies looking to the future. If these are to have a chance, the case has to be made for a freer and more open society. That requires all of us to not turn away from this challenge as this new year and this new decade begin. (See my articles, “The Bad Economics of Short-Run Policies” and “Freedom Requires Resisting Coronavirus Pessimism” and “Don’t Confuse Free Markets with the Interventionist State” and my book, For a New Liberalism [2019].)

This article was originally published at The American Institute for Economic Research.

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