Popularity Does Not = Prudence

The White House is touting this Pew Research Poll [PDF] from yesterday showing that 57 percent of Americans favored the initial outlines of the proposed massive federal bailout of the financial sector. However, a new L.A. Times/Bloomberg poll says 55 percent of Americans oppose a Washington bailout.

In any case, marginal poll advantages are hardly any way to run economic policy. For instance, as Robert Samuelson reminds us in today's Washington Post, both those figures above positively pale in comparison to the public support for one of the most odious economic policy measures during reason's 40 years of existence (donate now!):

Contrary to much commentary, Paulson's plan would not be the largest government intervention in the private economy since World War II. That distinction still belongs to Richard Nixon's imposition of wage and price controls in August 1971. True, Paulson would socialize unprecedented amounts of private debt, but Nixon asserted control over the entire economy. What's fascinating are the possible parallels between the two episodes, starting with a shared irony: Both came from administrations committed to "free markets."

When Nixon declared the wage-price freeze—a complete surprise because he had consistently opposed controls—the decision proved "wildly popular," Rice University historian Allen Matusow writes in his book "Nixon's Economy." By one survey, 75 percent of Americans supported it.

"There was widespread public rejoicing that at last the government was protecting the people," Herbert Stein, a Nixon economist, later observed. Consumer price inflation, which had been rising at a 4 percent annual rate, dropped toward 1 percent. People believed that by acting decisively government could outlaw inflationary psychology. It couldn't.

reason on wage and price controls here.