by Locker Room contributor
In the latest Newsweek, Rana Foorohar offers this assessment of economists? efforts to explain ?our failed financial system?:
For the first time in decades, the profession is rethinking all the big questions. How do we create growth? How do we raise employment? How do we spread wealth? At least since Reagan, the consensus was that you just had to make the pie grow, and the best way to do that was to unshackle markets and investors, and then get out of the way. Wealth, and thus health, happiness, and all other good things, would eventually trickle down to all.
Now that this view has been proved false, a whole slew of new theories are competing to take its place.
Ms. Foorohar offers plenty of clues about her own disdain for an economic system based on free markets and limited government action. Some designated collective ? designated ?we? ? must be responsible for creating growth, raising employment, and (as Joe the Plumber would be sad to hear) ?spreading the wealth.?
The discussion is much different if the questions are: How does growth happen? How is employment increased? How is wealth created? Approaching those questions without assuming a role for collective government-dictated action offers a different perspective.
The author also revives the old attack on supply-side economics when she mentions the words ?trickle down.?
But these objections are mere quibbles compared to this one: when was ?this view? ? at least when stated properly ? ?proved false?? Our government never has unleashed markets to the extent that a market failure was possible. Thomas Woods and Thomas Sowell are just two of the experts who?ve explained in the past year how the government played the key role in causing our problems.
Perhaps Ms. Foorohar should sit through Bruce Caldwell?s class on the history of economic thought before she delves into the future of economic theory again.