If a little deregulation is good...

The lead (not cover) article in Newsweek is "The Fall of America, Inc." by Francis Fukuyama. America has a "brand," a particular set of values we project and the rest of the world has, until recently, wanted to imitate. Two of the biggest ideas of the brand were unregulated capitalism and liberal democracy.

After the Great Depression and prior to Reagan governments thought the more programs and regulation they offered the better things were for their citizens. However, welfare states and red tape were proved to be dysfunctional (as shown by Communism). Reagan and Thatcher cleared a lot of that away and while they made it easier to fire workers (and made the economy more chaotic), it also made it easier to hire them. That led to three decades of growth.

The problem is that Reagan's pragmatism became dogmatic ideology. Just because tax cuts and deregulation set the stage for growth doesn't mean that even more tax cuts and more deregulation will mean more growth. Clinton raised taxes and the economy still grew. This fallacy was masked because foreign governments were so willing to buy up our debt, leading Cheney to proclaim, "deficits don't matter." But the dollar dropped and the credit markets have frozen, proving Cheney wrong.

The goal of exporting liberal democracy has been around since at least the end of WWI and until Bush II has not been controversial. But Bush's claim of liberating Iraq for reasons of democracy has been seen as a cover for Imperialist goals.

The next president has a lot of work to restore our brand. And one important ingredient is to replace dogma (on both sides) with pragmatism.

*-*-*

If you remove regulation what stands against greed and corruption besides conscience? The recent credit crash showed us that when it is always legal to make a buck and there are no bad consequences to making a buck, people are going to rake in the bucks until disaster happens. Then the perpetrators will moan about the corruption their deregulation made inevitable.

Do the deregulators honestly believe their efforts will build a better society? Does self-interest drive society to its greatest heights? Is raking in money good for the society as a whole or just for the one pulling in the bucks? Do the people who are left behind deserve it? (I wrote about that just a few days ago.) Perhaps they aren't greedy enough? Isn't having a conscience giving the other guy an advantage?

If greed equals profit, then capitalism says any personal enrichment can be justified as a contribution to the society. What rises to the top of society isn't the fittest, but the unfit -- those who only know how to enrich themselves and know how to influence lawmakers to aid in protecting their money and removing constraints to make more.

If deregulation is the goal of conservatism then what we're living through now is success. Even in this "success" McCain is calling for reform. What does he really mean? Perhaps he claims the fundamentals are sound to reassure businessmen that the market will take care of itself and he need do nothing. Perhaps he'll do the bare minimum. Perhaps he'll call for more deregulation. All of which will lead us back to where we are now.