Market Institute President Charles Sauer has a new piece in RealClear Markets on the economic policies of the current Biden administration.
“President Biden’s recent State of the Union consisted largely of celebrations of big government and proposals for new government programs. Yet, he actually described himself as a “capitalist.” This may top Richard Nixon’s claim that he “is not a crook” in the annals of absurd Presidential self-descriptions.
Biden the “capitalist” proposed new price controls on prescription drugs. Widely discredited by every credible health care provider, rescription drug price controls will not just reduce the capital necessary to finance development of new drugs, but will likely reduce the supply of life saving or sustaining medicines. Our capitalist President also proposed “Buy American” regulations as a means to fight inflation. But how can limiting the options available for business to purchase supplies lower costs?
Biden’s lack of understanding of how excessive government harms consumers, workers, and businesses may be a result of his spending almost 50 years in Washington. If Biden had spent some years as, say, a peanut farmer in Georgia, before coming to DC, he may have a better sense of the limits of government.
Yes, I am comparing President Biden unfavorably to President Jimmy Carter. In his first State of the Union address, President Carter uttered these un-Biden-like words: “we really need to realize that there is a limit to the role and the function of government. Government cannot solve our problems, it can’t set our goals, it cannot define our vision. Government cannot eliminate poverty or provide a bountiful economy or reduce inflation or save our cities or cure illiteracy or provide energy. And government cannot mandate goodness.”
Carter followed up his actions by making deregulation a major part of his economic agenda. Under Carter, airlines, trucking and rail were all deregulated. The result was lower prices and increased access to goods and services. For example, while less than 30% of the public had flown commercially in 1976, 60% of Americans were booking at least one round trip flight per year by the turn of the century.
Carter’s deregulatory initiatives were supported by many progressives of their day, including Ralph Nader and Sen. Edward Kennedy. Kennedy was assisted in his work on deregulation by future Supreme Court Justice Stephen Breyer, who said progressives supported airline deregulation because: “…. all the groups you’d think regulation was good for, and would want it—the consumers, the unions, even Ralph Nader—the economists, different people—they all say it’s bad? Who are the only people who like it? The airlines! They love it!”
Sadly, few—if any—Democrats today understand that regulation typically accomplishes the exact opposite of their goals. Even worse, many Republicans are embracing the regulatory state. These conservatives, which include Senators Ted Cruz and Josh Hawley, and some scholars at the Heritage Foundation, are supporting the use of government power to go after “Big Tech” companies like Facebook and Google.
Specifically, Cruz and Hawley are supporting Senator Amy Klobuchar’s “American Innovation and Online Protection Act” (S. 2992), and Heritage recently published a paper that supports the policies contained in this bill S. 2992 would, among other bad policies, put an end to small companies being able to voluntarily pay to access the large market that these platforms offer like Amazon’s “Prime” due to a provision called “self-preferencing.” And while failing to support small business that voluntarily want to work with these companies.
It is sad that President Biden, who as a Senator supported President Carter’s deregulation efforts, has forgotten the lesson of Jimmy Carter: that the best way to promote competitive markets that benefit small business, customers, and workers is through deregulation. But it is a tragedy that in 2022 Senators Cruz, Hawley, and the Heritage Foundation are not even as pro-free market as Jimmy Carter was in 1978.“
