As Barack Obama leaves the White House, his supporters point to low unemployment rates and low inflation as proof that his economic policies were a smashing success that saved the United States from another great depression.
Gene Epstein, columnist at Barron's and the author of Econospinning: How To Read Between the Lines when the Media Manipulate the Numbers, is having none of it. Pointing to historically low economic growth for the entirety of the 21st century, Epstein says, "I believe what explains the slowdown in economic growth since the year 2000—that is, under George W. Bush and Barack Obama—has been the fairly steady decline in the economic freedom index in the U.S. The bipartisan story in the '70s, '80s, and '90s is that economic freedom…generally rose. And those were eras of generally strong growth."
Since 2000, he stresses, Democrats and Republicans have "layered on" all sorts of restrictions on and interventions in economic activity, from major regulations such as Sarbanes-Oxley and Dodd-Frank to TARP bailouts (where bondholders were stiffed at the expense of labor unions) to massive borrowing. Every time the government intervenes or restricts economic freedom, says Epstein, market forces are dampened or frozen, resulting in less activity and innovation. As the United States drops in freedom (as defined by the Fraser Institute), it's no mystery why economic growth is shriveling up.
In a new Reason podcast, Epstein tells Nick Gillespie that he doesn't think Donald Trump will be much better, either. Despite deregulatory gestures in some areas (such as energy policy and finance), Trump is full-square in favor of trade protectionism and keeping immigrants out of the country. Free trade and a growing population, especially of immigrants who are ready, willing, and able to work and take economic risks, are vital to a flourishing economy, says Epstein. As important, he explains his (and Barron's) "prescription for U.S. economic growth" is built around cutting almost $9 trillion in planned government spending on the next decade.
Born in 1944 and raised in the New York area, Epstein talks about his early years as a socialist who worked for progressive economist Robert Heilbroner at The New School before encounters with the work of Noam Chomsky and Murray Rothbard turned him toward libertarian thinking on economic, foreign, and social policy.
Epstein also runs The Soho Forum, a monthly debate that meets in Manhattan's East Village. The next event takes place on January 17 and features Reason's Matt Welch debating Obama's presidential legacy with New York magazine's Jonathan Chait. For details, go here. In November, I debated economist Walter Block about whether libertarians should vote for Donald Trump (go here for a podcast of that).
Produced by Ian Keyser.
Subscribe to the Reason Podcast at iTunes and never miss an epsiode. Click below to listen now via SoundCloud.