10 Economic Myths That Need to be Corrected
We can argue over the best label for the economic system in the United States of America, but there can be little argument that “capitalism” or “free market” are among the worst and most inaccurate labels for what we have in America today. With quantity and price controls rampant throughout multiple, major U.S. markets, regulations galore, and some of the highest corporate tax rates in the world, the United States is a heavily controlled, heavily regulated, and heavily taxed mixed market economy. Of the ten planks in the Communist Manifesto, seven have become policy in the United States, and the government is working on the remaining three! Can that be fairly characterized as capitalism? Take a look at this list of U.S. government agencies, notice just how unbelievably many of them there are, and observe just how many aspects of life in America they regulate. It’s a Soviet commissar’s dream, and any true capitalist’s nightmare!
2. Deregulation in the 90s led to the recent economic crash.
Okay, Clinton signed one law in the 1990s that lifted federal regulation of one aspect of financial markets, and critics of deregulation like to say “We deregulated financial markets in the 1990s,” as if we completely overhauled the entire federal regulatory system, but that’s a big stretch and very misleading. Booms and busts themselves are actually caused by government intervention into the economy. Libertarian economists who understand this (many of them belonging to the “Austrian School of Economics”) have been incredibly accurate predictors of economic booms and busts. They predicted the Great Depression, the stagflation of the 1970s (that their opponents had always claimed was impossible), and the most recent credit and housing collapse. Their predictive powers are the result of their accurate theories and understanding. Here, I’ll let “F.A. Hayek” rap it for you.