Milton Friedman could have easily predicted this outcome: He had witnessed it first-hand when he worked as an economist for President Franklin Roosevelt during the Great Depression. Friedman watched the federal government expand greatly in order to use political power to control the economy and spread the wealth around. FDR increased taxes on the “rich” to a top marginal rate of 79% and on corporations (even their supposed “undistributed profits”) to try to pay for all the new agencies. He also instituted our largest entitlement program, Social Security. His actions were guided by the belief that political self-interest is nobler than economic self-interest.
The results were disappointing. During FDR’s first two terms in office, the national debt doubled and the economy languished. Roosevelt’s own treasury secretary, Henry Morgenthau, testified before a Senate Committee that the New Deal had failed to create jobs or restore the economy.
Friedman, who later served as an adviser to Ronald Reagan during the economic boom of the eighties, would undoubtedly look at what the Obama administration has been doing and ask, “Have you learned nothing from history, Mr. President?” Obama implemented the same Keynesian, top-down, New Deal-style programs as FDR, and with the same results. The national debt has increased by more than $5 trillion since Obama took office, and the real unemployment rate (including those who have stopped looking) is 15%.
Obama used stirring rhetoric to convince people that giving more power to the federal government to oversee the economy through regulation, higher taxation, and more entitlement programs would be their salvation. Facts are stubborn things, and we’ve seen the results of following that philosophy. As Friedman put it to Donahue, “Where are we going to find these angels to organize society for us,” who will not be dominated by political self-interest? When given the choice between trusting politicians to restore prosperity and trusting economic freedom to restore prosperity, choose freedom.
Randy DeSoto is a freelance writer and media consultant. He wrote and was the assistant producer of the documentary film “I Want Your Money” about the perils of big government, comparing the presidencies of Ronald Reagan and Barack Obama. Randy served as communications director for Joe Miller’s U.S. Senate primary campaign in 2010. He is a graduate of United States Military Academy at West Point and Regent Law School.