Commentary: There Are No Free Markets, Never Have Been ...

Thanks to Wall Street greed and malfeasance in Washington, our fragile economy and the president who inherited it, there was no other option.

by / May 18, 2009

We never had a truly free market. There has always been government intervention, even bailouts.

During the first session of Congress in the 1780s, the government interfered with the market by establishing tariffs to subsidize manufacturers, and by partnering with private banks, establishing the first national bank. In the 19th century, the government subsidized canals and a merchant marine and gave 100 million acres of land to the railroads along with loans to keep the railroads running. And more recently, the government bailed out Chrysler and the savings and loan industry.

In this new era of financial instability and meltdown, only big government -- a government that sees what could be the worst possible financial disaster in the history of our nation -- is able to provide some semblance of order again.

The last decade or more we have witnessed "trickle down" economics -- the belief that tax breaks, income gains and wealth creation among the wealthy eventually work their way down to the middle class -- run amok; and with it a downward spiral of real economic wealth and income of the average American, a decline in personal savings, the eradication of a middle class and a virtual disappearance of any kind of safety net for people with disabilities, the unemployed or homeless.

Wealth has been concentrated in the hands of the few -- less than 1 percent of the population. If you're lucky enough and are part of the 1 percent, perhaps you still believe that government -- as the late Ronald Reagan was fond of saying -- is a problem, not a solution, that capitalism is still in triumph in the world and what we're experiencing is merely a correction in the markets.

There is no doubt that the $787 billion stimulus package had a lot of fat in it, nor that more of the liberal concerns have been funded by a Democratic majority in Congress.

There's no doubt, too, that the stimulus was and is the only solution that President Obama had left, that he had to revive an economy in peril and get any semblance of a working economy with money flowing again in the credit markets.

Thanks to Wall Street greed and malfeasance in Washington, our fragile economy and the president who inherited it, there was no other option. This is not -- as opponents are crying -- a new wave of socialism or destruction of the so-called "free market."

It's hard to be a capitalist frankly, but tea parties being held across the nation are not the answer.

As Newsweek magazine put it earlier this year: "We are all socialists now. if we fail (to understand) the reality of the growing role of government in the economy, we're doomed to a fractious and unedifying debate. The sooner we understand where we truly stand, the sooner we can think more clearly about how to use government in today's world."

John M. Eger -- a Van Deerlin endowed chair of communications and public policy in the School of Journalism & Media Studies at San Diego State University -- was telecommunications advisor to Presidents Nixon and Ford.