The Chinese government is placing many American statists in a very interesting position. It has unveiled a “stimulus plan” involving a massive expenditure of $586 billion dollars of government money.
Sounds familiar, uh?
As the Washington Post pointed out yesterday in a front-page article, economists are comparing the Chinese plan to the New Deal, which was the economic plan that President Franklin D. Roosevelt adopted to address the Great Depression.
American students, especially those in public schools and government-licensed private schools, have long been taught that the New Deal was a “free enterprise reform plan” that “saved free enterprise.” Having grown into adulthood, many of those students, not surprisingly, continue to hew to that official line that was ingrained into their minds year after year. The thought that Roosevelt’s New Deal was actually a combination of socialist and fascist measures that constituted an abandonment of the principles of economic liberty on which our nation was founded has, tragically, never even entered the minds of many Americans. (For an excellent analysis of Roosevelt’s New Deal, see Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany, 1933-1939 by Wolfgang Schivelbusch.)
The major exception to this rule is libertarians, who have broken free of the official indoctrination. Libertarians realize that not only was Roosevelt’s New Deal a combination of socialistic and fascistic government programs, which actually exacerbated the Great Depression, but also that the Depression itself was the fault of Federal Reserve monetary manipulation rather than the “failure of free enterprise.”
So, how would American statists analyze the Chinese “stimulus plan,” given that it is comparable to Roosevelt’s New Deal? After all, everyone would have to concede that China has a socialist economic system. Would American statists honestly claim that China’s stimulus plan is actually a “free enterprise reform plan” to save socialism? Surely they couldn’t make that claim with a straight face.
Yet, many of them continue to claim, with a straight face, that “free enterprise” has caused the current financial debacle here in the United States and that their bailouts and stimulus plans are “free enterprise” reforms to “save free enterprise.” That’s the same claim they make about Roosevelt’s New Deal, to which the Chinese stimulus plan is now being compared and which is intended to save socialism.
Fannie Mae and Freddie Mac? Government-created institutions.
Monetary manipulation and bank regulation? The Federal Reserve.
Guarantees of mortgages? Government-granted.
Laws requiring the making of high-risk loans? Government enacted.
HUD? A corrupt government department.
Regulation of the stock market? The SEC.
Mortgage deductions? The IRS.
Despite all this government involvement in economic affairs, American statists steadfastly continue to maintain, with a straight face, that the current financial catastrophe constitutes the failure of “free enterprise” and that all their bailouts and stimulus plans are “free enterprise” methods to save “free enterprise.”
The Chinese stimulus plan is just another reflection of the life of the lie and the life of unreality that American statists have lived for so long. The unvarnished truth is that the Chinese stimulus plan is just more socialism and interventionism, just as the U.S. bailout and stimulus plans are. Facing such truth is a necessary prerequisite to getting our nation off the socialist and interventionist track that the Chinese socialists are taking and back on the right track — the track of economic liberty, free markets, private property, and limited government.