Let the Free Market Work

Ronald Reagan rode into Washington in 1981 on a horse named Hostility to Government. He was going to cut taxes (very popular amidst the stagflation of the 1970s), reduce “gubmint” spending by ferreting out “waste, fraud and abuse,” eliminate what he saw as unnecessary government regulation and engage in a massive buildup of the military (also very popular in the context of the Iran hostage crisis, which dragged on throughout the 1980 election year). There was an inherent contradiction, of course, between Reagan’s people/government dualism. For if government was indeed a threat to individual liberty as Reagan claimed, it was curious that he was campaigning to run it; and while he certainly cut government spending on social programs, he also engaged, as previously mentioned, in a huge buildup in our nation’s armed forces and inaugurated development of a missile defense system. Nonetheless, it was clear from his rhetoric, at least, that Reagan saw government as inimical to the interests of the public. That the same government grew tremendously during Reagan’s presidency was certainly ironic, but one doubts that the majority of the public, 80% of which was getting all of its news from television, was aware of the paradox. It should thus be no surprise that those seeking to emulate Reagan would, like their mentor, ignore the abundant contradictions in his record and rhetoric, and simply repeat his mantra: government bad, people good. Let the budget cutting and regulation erasures begin.

When in 1995 the GOP-dominated House of Representatives sought to force President Clinton to enact a series of draconian cuts in social spending, they shut down the government as a means to that end. This was accompanied by the familiar Reagan rhetoric of a government/people opposition, and produced what should have been for everyone involved a predictable result: Millions of people across the country couldn’t get their social security checks. Many others, employees of the government at various levels, couldn’t get their paychecks. Businesses were unable to apply for government loans and grants. An enormous public outcry ensued, and the Republicans in the House backed down. There was clearly a relationship between the people and their government more complex than the simple opposition articulated by Reagan and his ideological heirs.

Yet while they abandoned the tactic, the GOP remained tied to the ideology that produced it. Thus the Glass-Steagal Act, enacted during the Great Depression to regulate the nation’s financial markets, was overturned during the Clinton Administration. And during the presidency of George W. Bush (who has proclaimed himself a dedicated follower of Reagan), regulations of all sorts have been tossed aside. This was supposed to free American entrepreneurs to reach their full potential, unencumbered by the dead hand of bureaucratic second-guessing. As Reagan often said, “Let the free market work.”

The results of dispensing with government oversight of such things as the building and testing of flood levees, the financial markets, food and drug safety, environmental regulations and contractor behavior in Iraq have been as predictable as was the public reaction to the 1995 government shutdown. But some things no rational person should expect. A story on the front page of today’s New York Times describes how, in the true spirit of Reagan, the Pentagon awarded a $300 million contract for Afghan army weapons and supplies to a company led by two twenty-somethings. The contract was loosely worded; oversight, nonexistent. The company purchased arms from Albania, China and various parts of the former Soviet Union. In many cases, the materials purchased were 40 years old and barely functional, if at all. The Afghans started complaining, American military personnel did the same, and now that the story has come out, the Pentagon has dropped the contract and Democrats in Congress want to talk to the company’s young officials.

Even by the —ahem— standards of the Bush administration, this is astonishing, but I’m sure that with 10 more months to go, the Decider and his cronies will find some way to top it. God help us all.