Sebastian Mallaby's "Capitalism: The Remix" suggests that uninformed whiners like myself oughtta take a deep breath, 'cause the free market ain't goin' nowhere. On the other hand, neither is Big Government.
"Even before the financial crisis, government was expanding. Public
spending as a share of the economy jumped under President Bush, and
regulation increased, too, notably in the form of the Sarbanes-Oxley
law on corporate financial disclosure. Commentators trumpeting the
abrupt death of free-market, small-government Republicanism appear to
have slept through the Bush years.
". . .in an acute recession, government spending has to expand aggressively
to make up for weak private spending. As a top adviser to Bill Clinton
in the 1990s, Larry Summers supported reducing the deficit; as a top
adviser to Barack Obama now, Summers supports massive deficit spending.
This is not a flip-flop. Summers favors crisis spending now because we
are in a crisis. In five years, he will again preach budget discipline.
There is no paradox, no tarnished ideology."
Mallaby goes on to say that Government is growing, but that it's perfectly natural.
"For now, government needs to stimulate the economy, but even after the
recession ends, there will still be pressure for more government
spending. People rightly want the things that government produces:
security (from criminals and terrorists), clean air and water, food and
medicine whose safety is guaranteed by regulators, public education,
and so on."
It all makes a lot of sense, and seems to diffuse the reactionary responses to the economic crisis from those on the Right (oh noes — public works = socialism!) and the Left (eat lead, filthy capitalist pigs!). Here's the coda:
"The growth of U.S. government need not be an economic disaster. Sweden
and Denmark combine large public sectors with fast growth in GDP per
capita. But to get away with big government, you must have smart
government. Once the financial crisis is behind us, this should be the
guiding principle of the Obama years."
Happily, this seems to be exactly what our soon-to-be President is working toward. Of course, we can fight about it in the comments if ya want. . .