Today the mantra is “Free Markets uber alles.” New economists say that Adam Smith’s “hidden hand” is the most efficient regulator. Government get out of the way. This economic conceit came back into fashion about the time that the last economists who remembered 1929 either died or retired.
Even after the Enron debacle, true believers of unfettered markets have not wavered. The few critics are not welcome as the believers gather in their comfortable cocoons. In the spirit of old fashioned journalism, this column hopes to comfort the afflicted and afflict the comfortable. In a time of faith, skepticism is the most intolerable of insults.
Remember when you could hop a plane to Indianapolis just about any time day or night? Or, you could get truck service if you had a business in a small town up the road. No more. Deregulation stopped all that. What good is it if we can fly coast to coast for $100 if it costs $400 to get to a connecting point?
Airlines, trucking and natural gas were the first hit with the deregulation hysteria of the late seventies and early eighties. Later came electric power, banking and much of telecommunications. Republicans were always on board this bandwagon but Democrats also discovered that deregulation was a terrific way to raise money.
As we have seen through history, corruption gathers in the shadows when government turns its back. In the mid nineteenth century Credit Mobilier was formed to build the Union Pacific Railroad and politicians and businessmen raked off millions. Then it was whiskey distillers and tax revenue scandals, later it was illicit payments at Indian posts. In the past 75 years we have watched crooked deals in Teapot Dome and the Savings and Loan swindles.
In the 1920s, public utility companies got control of local utilities, sold watered down stock to the public, enriched insiders, and raised prices. New Deal legislation stopped such shenanigans but now modern day sharks want to swim in waters free of these depression era laws. This climate has given us Enron and who knows what else?
Contrary to today’s free market doctrine, regulation never resulted in much increased costs. One reason is that there are whole sections of our economy that cannot be left to the free market.
§ Health care. People who could not afford care would just get sick and die. Infectious disease would spread.
§ Education. Poor parents would not afford tuition and half the children wouldn’t go to school.
§ Drug manufacture. Government provides research dollars, offers patent protection, and assures safety and effectiveness.
§ Environment. Competition, without regulation, forces factories to treat air and water as a free sink
Can you imagine a baseball game without umpires? It would be like a crematoria stacking bodies because it’s cheaper; like understaffed nursing homes with neglected patients, like the California electric bill; toxic dumps, drug company price gauging, and so it goes.
For a civilized society, government must be the umpire. Not only to provide a level playing field but to stop the crooks. Often it takes plain language to express the truth. We can then take pleasure from the discomfort the truth so often evokes.
