THE GREAT MONEY BINGE: SPENDING OUR WAY TO SOCIALISM
By George Melloan
Threshold Editions, $26, 286 pages
REVIEWED BY JOHN R. COYNE JR.
“We are witnessing a government out of control, piling trillions of dollars of new unfunded future obligations on top of the many trillions that already exist,” George Melloan writes with the clarity and polemical skill honed over a half-century at the Wall Street Journal, where in the 1980s he and his editorial-page partners played key roles in launching the supply-side revolution, giving birth to Reaganomics and two decades of unparalleled prosperity.
But as the programs of the Obama administration and Congress unfold, Mr. Melloan thinks we’re returning to the same ruinous policies discredited by the supply-siders. By mid-2009, he writes, with “signs of an incipient flight from the dollar … investors around the world were beginning to wonder if the Americans had gone mad. That concern was heightened by Washington’s fixation on ‘global warming’ and the totally implausible plan to fight this mythical monster pushed by the tiny terror from Beverly Hills, Henry Waxman. His legislation … imposed new taxes and stringent regulations on energy use at a time when industrial layoffs, not sunstroke, were the nation’s foremost problem.”
Of those representatives finally voting to pass the massive (1,200 pages) “clean energy bill” which, typically, few actually read, Mr. Melloan writes: “They simply obeyed the orders of Speaker Nancy Pelosi, who afterward proclaimed, rather hysterically, and with total disregard for the truth, that it would create ‘jobs, jobs, jobs!’ Add to that the hash Washington was making with its meddling in the auto and banking industries, and you can see why even the hard-core statists of Paris or Beijing might be wondering about Washington’s mental health.”
Mr. Melloan hopes to restore a measure of that mental health by analyzing current plans for “dramatic expansion of government power in … health care, education, transportation and energy”; revisiting ‘the dismal record of past progressive efforts … toward state control over economic processes”; and offering “an alternative prescription for restoring economic policies … that will once again unlock the productive and creative energies of the American people, just as the supply-side revolution did in the 1980s.”
Mr. Melloan provides examples from the crash of 1929 and the one-term economic disaster that was the Carter administration of how government intervention exacerbates economic malaise by preventing the economy from recovering its natural balance - precisely what happened from the 1930s to the 1970s, with the wholehearted acceptance of the theories of John Maynard Keynes. But the great and growing economic distress of that decade demanded a new approach. The result was the Reagan Revolution and the unprecedented period of national prosperity that ensued. Mr. Melloan thinks the reapplication of supply-side principles would have similar effects.
Of course, Mr. Melloan writes, supply-side solutions have little appeal to our current crop of incumbents, for they’d contract the federal bureaucracy. “They do not allow the Barney Franks, Henry Waxmans, Chris Dodds and Nancy Pelosis … to play God with the economy. But for anyone who wants a restoration of economic stability and sound economic growth, they are good building blocks to substitute for the economically destructive policies now in play.”
Moreover, as Mr. Melloan points out, “The American political system constantly springs surprises, and sometimes they come when we most need them. The American private sector, with all its hard workers, its entrepreneurs, its talented research scientists, its skilled professionals, its engineers, and its sober, realistic managers … has standards of its own and they are in conflict with those of the ruling party. Americans who believe in individual enterprise, the sanctity of contracts, the protection of private property … are looking at the direction government is heading and, for the most part, they are not happy.”
“Seeing the problem clearly,” he concludes, “will be the first step toward restoring the individuality and self-reliance that built a great nation.” Illuminating the problem is the challenge Mr. Melloan has set for himself, and he meets it with strength and conviction, in prose tempered by a professional lifetime of solid experience on one of the nation’s finest editorial pages.
In her introduction, Amity Shlaes, author of a splendid revisionist history of the Great Depression, “The Forgotten Man,” puts it this way: “As The Great Money Binge is published, a ghastly unity of official opinion holds that the world is entering the post-capitalist era … But the market’s moment will come again. While the world waits it will want to prepare. The best way to do that is to sit down with this book and make the acquaintance of its author, George Melloan.”
• John R. Coyne Jr., a former White House speechwriter, is co-author with Linda Bridges of “Strictly Right: William F. Buckley Jr. and the American Conservative Movement” (Wiley, 2007).