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Home Publications Blogs Beat the Press E.J. Dionne Understands Zero Economics

E.J. Dionne Understands Zero Economics

Thursday, 27 October 2011 05:21

There is a caricature of political debate that the right has invented whereby conservatives claim to be supporters of free markets whereas progressives want government regulation. This was always utter nonsense, but it should be especially apparent that it is utter nonsense today.

Few mainstream conservatives supported letting the market put Wall Street out of business when the collapse of the speculative bubble in the housing market made most major banks insolvent in the fall of 2008. At the moment, Europe's leaders are meeting nearly around the clock to devise a plan that will have the effect of saving the big European banks from their bad investments in sovereign debt.

There are almost no major figures in politics who are actually opposed to government regulation. In fact, it is not even clear what that means. Do they want to get rid of deposit insurance for banks, or patent and copyright protection? The real issue is whether the government is going to structure markets in ways that have the effect of pushing income upwards, which has been the situation for most of the last three decades or whether it will design policies that benefit the vast majority of the population. This is the 1 percent versus the 99 percent question.

It is hugely advantageous to conservatives, who want the government to advance the interests of the 1 percent, to have their position framed as a pro-market position. It is far more politically palatable to be seen supporting a free market than to be supporting policies that are intended to aid a small elite at the expense of the bulk of the population.

It is therefore understandable that conservatives would embrace the market versus intervention framing of the debate between conservatives and progressives. It is much harder to understand why someone who is left of center, like WAPO columnist E.J. Dionne would embrace the same framing.

[Dionne's framing is a textbook example of loser liberalism.]

Comments (9)Add Comment
written by bmz, October 27, 2011 8:35
Yes and no.Together with subsidizing income tax deficits with payroll tax surpluses, healthcare has been the primary mechanism for redistributing income and wealth upwards. But for increasing health care costs, over the last three decades median US real wage increases would have more than doubled. US healthcare costs are twice, or more, than those of virtually every other industrialized country; and consistently, the incomes of physicians in the US are over twice theirs. Because our competitors’ healthcare costs are so much lower than ours, our manufacturers and workers suffer huge competitive disadvantages. Hence, the single most important way that we can reverse the upward redistribution of income is to adopt a fully socialized healthcare system (similar to those of our competitors, and the Veterans Administration). This is also the primary reason that Republicons so strenuously resist attempts to reform healthcare
Wisdom of Crowds Rules in the End to Provide Truth, Low-rated comment [Show]
who regulates the regulators?
written by frankenduf, October 27, 2011 9:18
actually, the hard core left are closer to anarchism than 'government regulation'- to the true liberal, concentration of power is the root of all evil, because of corruption- local communal governance, or communes, would be functional political entities which would interplay to form the larger political landscape- yeah, it's utopian, but then again so is a 'free market'
written by skeptonomist, October 27, 2011 9:36
What does this post refer to? Dionne's latest column is about the Pope.
So Reagonomics worked? So confused Deano....
written by pete, October 27, 2011 10:44
"The real issue is whether the government is going structure markets in ways that have the effect of pushing income upwards, which has been the situation for most of the last three decades or whether it will design policies that benefit the vast majority of the population. This is the 1 percent versus the 99 percent question."
What conservatives vs what they do.
written by William Berkson, October 27, 2011 11:16
I see your point, but I think it's somewhat unfair to Dionne. Conservative leaders in congress do pretty consistently advocate less regulation, so you are wrong when it comes to what they say. They are so intellectually dishonest that they advocate a position they don't believe. That a fair enough point, but it seems to me also reasonable to rebut the argument they are making. So it's necessary to rebut both the argument, and the reality. It's not one or the other. We need both points, it seems to me, plus calling them on the lie.
I like E. J. Dionne
written by hitesh brahmbhatt, October 27, 2011 11:35
He is one of my favorite TV talking heads because he is left-of-the-center as you say.

You are right about "loser liberalism" but why pick on poor E. J.? He is following the mainstream democratic narrative script I guess.

You are right that democrats need to embrace "liberal" and make it cool again like Paul Krugman does but that is generalized problem with Left in this country not any particular columnist.
I concur, but ...
written by Shawn Wilkinson, October 27, 2011 1:22
I concur with the poor framing of the liberal vs conservative viewpoints of the market and government regulation, but I don't see how this applies to Dionne's op-ed. From what I get from the article, "conservative Catholics" are trying to distance this report from one of the Pontifical offices from "True Catholicism", and this report finds that increased governmental oversight combined with all actors acting ethically with a bent toward some global good should be the goal. I don't see where Dionne explicitly calls these "conservative Catholics" free market advocates, and I don't see where he implies it either.
written by gordon, October 27, 2011 7:49
Good post, but one quibble. Why talk about "conservatives" when you really mean "right-wingers"?

If a conservative is somebody who is reluctant and suspicious about change and who is particularly inclined to oppose fast, large-scale change, then the "conservatives" you refer to in the post are really howling radicals. Massive deregulation, privatisation, destruction of unions and redistribution upwards, all at a breakneck pace, are characteristic of the people you call "conservative", but those policy goals are really almost the opposite of real conservatism.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.