Where this contest is won

Pete Du Pont is on fire, today, in his dead-center column on "progressive" economic policies and the likely consequences for the economy.

Don't Pull Back: 'Progressive' policies would cause economic regression

From that column:

"These two governmental takeovers have raised important questions concerning the future course of our country: How much government money and how much government regulation of the private sector should be a part of our market economy? Should America become a Europeanized sort of a nanny state in which the government manages our industries, their boards of directors, their products and their finances?

It shouldn't, but it is clear that the incoming Obama administration believes strongly in governmental control of a great many parts of our economy. During the campaign, Barack Obama called for a 10% to 12% annual increase in government spending, which will likely come on top of our current congressional spending surge, which according to USA Today 'is increasing the federal share of the nation's economic activity close to $1 out of every $4, the highest level since World War II,' and will give us "a budget deficit headed towards a record $1 trillion.'

Mr. Obama is urging several other pieces of government control legislation that would quickly Europeanize America's future.

After automobile manufacturing control, the next effort will be to mandate government regulation and operation of health care: a federal statute regulating the price, content and supervision of health care, and a government council to significantly regulate the content and cost of health care policies (see my November column).

Next, the regulation and downsizing of international trade. Trade creates jobs--some five million Americans work for overseas companies. The export of American products support some six million domestic jobs, the export of services another five million, and U.S. trade as a share of gross domestic product reached 29% in 2007. Mr. Obama opposes trade, from his previously stated opposition to the North American Free Trade Agreement, to his dislike of other regional trade agreements, so we will see our economy shrink if these policies are followed.

As for the environment, the Boxer-Lieberman global warming bill that failed to pass the Senate last June will be back, and with the Democrat Senate's new 58-seat majority instead of the current 51, it is much more likely to pass. This bill would shut down coal-fired plants and contains more than 300 production regulations and mandates, from a federal commission to impose environmental controls on businesses, to a protectionist agency that could impose tariffs on imported goods.

In short, bigger and more intrusive government is rolling down the tracks toward us. Taxes will be higher, government spending will be larger, and matters from automobile manufacturing to health care and trade will be Europeanized. The government will be in charge.

As Mr. Smick concluded: 'Today the United States is a politically polarized nation plagued increasingly with thoughts of class warfare and unable to exert economic leadership in the world. . . . Nervous markets sense that American policy makers are pulling back.'

But America mustn't pull back, it must move forward, with low taxes, expanded global economic trade, and less, not more, government interference in the marketplace. It does not look like we are moving in those directions, but we should be."

There is where this contest will be won and lost, ladies and gentleman. And, I have full confidence, will be won by those who honestly value the free market. In the empirics.

You can make as many weak arguments and construct as much weak propaganda for a position as you please.

But only the strongest understandings and arguments win out in the marketplace of ideas. And the strongest understandings are yielded from the empirical evidence. And, given the trends of almost the entire 20th century, but especially the last 50 years or so, I have very little doubt that general thrust of Pete's argument is correct, here, and that Keynesianism and socialism, in the form of government-sponsored intervention in the economy, will see its last twilight as a serious economic or political theory.

The kids and I had a fantastic discussion, today, actually, getting underneath why the most desperate poverty, in the form of starvation and debilitating and life-threatening disease, can only be addressed through the market, with temporary government interventions being necessary only in the cases of extreme deprivation - hence, the quite sensible public disapproval of the current financial bailouts of affluent industries in the United States; all in the name of socialism, mind you - but a commitment to for-profit and non-profit markets of committed citizens engaged in genuinely democratic efforts to tackle the world's most serious problems is the direction we should be headed, with their ideas and efforts being rewarded or allowed to fail on their own merits.

Pete is quite right that this is exactly the direction that the world should be taking, right now. And I am quite confident that this is exactly the direction the world will be taking. As soon as enough people see the folly of our ways.

And seeing the folly of our ways is what free and democratic peoples do best.