Madrick's Case for Big Government
By David Henderson
In the latest issue of Regulation, my review [.pdf] of Jeff Madrick’s The Case for Big Government appears. One of my favorite grafs:
If economic freedom works, he argues, our economy should be doing very well because we have had “the rise of laissez-faire economics since the 1980s.” What is his evidence of the rise of laissez-faire economics? He gives none. That’s not surprising given the heft of the Federal Register, the U.S. government publication that lists new regulations. It averaged 72,844 pages annually during the Carter years from 1977 to 1980, just before Madrick’s “laissez-faire” 1980s. The average fell to 54,335 during the Reagan years, rose to 59,527 during the George H.W. Bush years, then to 71,590 during the Clinton years, and finally to a record 75,526 during the administration of the supposed great believer in laissez-faire, George W. Bush. It’s true that Federal Register pages aren’t a perfect measure: when governments deregulate, they must announce those changes, and so some of the pages represent genuine deregulation. But most of the pages listed new regulations, no matter which president was in power at the time. Far from moving away from regulation, the U.S. economy has become even more regulated in recent decades. The almost quarter of a million federal regulators would be surprised to learn from Madrick that they don’t have jobs.
Another of my favorite passages:
He writes that the high levels of unemployment insurance in Western Europe “can remove less productive workers from the labor force.” The remaining workers would then have a higher average productivity than otherwise because of the exclusion of less-productive workers. We could achieve that same outcome in the United States and vault way ahead of Western Europe in output per worker simply by removing from the workforce all workers whose productivity is less than $100,000 a year. We, too, would have a very productive labor force — along with few people working and mass poverty.