THE BATTLE BETWEEN SOCIALISM AND THE FREE MARKET
Recently I found buried on a company server a number of papers that I wrote during the Obama and Trump eras. In many ways, their content demonstrates that elections have consequences and that the volatility the American economy has experienced during that time period is self-inflicted through the radical policy swings between Democrat and Republican Administrations. The economy has been volatile for the last few years, and is seems as though the ongoing major issues that face the American economy will never resolve. The reason appears to be almost overwhelming when viewing the economy through the lens of ongoing short run events (bottom up), but is far less complex when viewing the economy in a longer run format (top down). Keep in mind that the original term identifying the field of economics was political economics – underline, capitalize and emphasize political.
During the Obama Administration (2008 to 2016) the economy was burdened by massive amounts of regulation and anemic fiscal policy that severely constrained economic growth. Eight years of Democrat control hampered the free market and moved the country in the direction of the socialist model. The 2016 election (Trump Administration) issued in three years of a free market friendly pro-growth fiscal environment which was truncated by the horribly mismanaged Covid-19 lockdown. Prior to the pandemic lockdown, economic growth was robust which typically results from positive pro-growth fiscal policy. Republican control during those years effectively unshackled the free market and the economy reacted positively. Not all of the economic success of the Trump Administration can be attributed to Trump’s pro-growth policies. To some extent the stagnant nature of the Obama’s “new normal” slow growth for most of the eight years of his administration left the economy (free market) like a compressed spring which uncoiled when the Trump Administration gave the free market the green light to spin its’ magic. The 2020 election ushered in the far-left Biden Administration which resulted in a sharp political turn to the left. In a mad rush to undo all of the Trump era policies by shackling fossil fuel production and pushing tax and spend policies, the Democrat party drove a thriving low inflation economy into a ditch causing the highest inflation in over forty years and a lingering recession. It is an easy argument to defend that much of the volatility in the American economy is attributable to the bipolar political environment that has taken turns directing, redirecting and misdirecting regulatory and fiscal policy.
The issues presented above are discussed in greater detail in a number of the archived papers, as well as oil market realities, the destructive push toward socialism and the massive success of the free market over time. When reading any of the following papers keep in mind the date they were written. The archived paper in chronological order are as follows:
Economic Issues – The Classical/Keynesian Divide 2015-2016
World Oil Market – Global Growth and the Middle East Mess – Written Pre Trump 2015-2016
World Oil Market – Global Growth and the Middle East Mess – Post Trump Election -2017
Democrats – A Socialist Movement – Philosophical Differences and Tactics – 2018 Q1
The Fallacy of Socialism – An Economic Lesson That Must Be Constantly Retaught – 2019
Free Riders – China And The Democratic Socialist Nations – 2020 Q1