Close of the market, 9/29/08

My political/economic socialization came during the heady days of free market zealotry.  1984 was a year when it seemed like many of my friends — who never cared for politics or economics in high school — found a new religion at college: free market economics.  Fueled by the Reagan-era drumbeat that the free market can take care of itself, I had to suffer through endless panegyrics about how government regulation was snuffing the life out of a potentially vibrant economy that, if left to its own devices, would shower down the goodies of jobs, better pay, more products, and better services to the masses. The joy with which they talked about this new utopia had the conviction of an Amway convert in search of willing salespeople to join in on the pyramid scheme.

In the political realm, deregulation and lower taxation take the form of a V, where those at the top of the income bracket paid the least amount in taxes, creating favorable conditions for a surge in economic growth.  It all seemed to be going as planned — even through recessions, and um, Bill Clinton’s tax increase (Shhhh!).  The prescription for a good economy was to continually reward those at the top with a “less is more” approach.  In good times, lower taxes.  In bad times, lower taxes — and if you do, we’ll all get more in terms of a vibrant economy. One problem is that while people love the sound of lower taxes, they don’t really like it when their government benefits get cut — unless those benefits are framed in such a way as to evoke a negative response.  Case in point, the term “Welfare.” I once explained to friend who was enjoying his free market high that I was on welfare (I’m such a buzzkill sometimes).

“Huh? What? Are you on food stamps?”  He said.

“Nope,” I said, “I go to a state university and the good people of California pay taxes to maintain that system so I can get an education at a very discounted rate.”

“Well, that’s not welfare,” he snorted.

“Really? What would you call it, then? The free market?” I asked.

“Um no. I would call that an investment into the education of the citizenry,” He opined.

“Investment for what?” I asked. (more…)