Sunday, February 21, 2010

The Paradox of Free-Market Paternalism

There has been a lot of discussion lately about whether Obama is doing a good job as president. The state of the economy ranks as a top concern for most. Economists note that the current recovery may be a jobless one, especially at the outset. This jobless recovery, coupled with the frayed social safety net, leaves many Americans in a desperate situation. A recent article highlights this problem as well. As criticism of Obama persists, many are failing to identify the underlying contradiction inherent in that criticism.

For many, this jobless recovery has served as a platform to claim Obama is not doing enough to help average Americans. However, most of those making these claims are the very same people who consistently state that the government is the problem, not the solution. In that sense, they are contradicting themselves. You cannot have it both ways, criticizing government for being not involved enough and also too involved. Clearly industries regulated only by their endless greed have created an economy where good careers are increasingly difficult to find and irregular, poorly-paid jobs are the norm. This has come at a time of decreased union presence and a general malaise on the part of American workers to make their interests heard.

Related to this is Americans' belief that "our system of government is broken." Despite this popular idea, government (at all levels) does more things well than it does poorly. It provides necessary services to Americans for prices no corporation could achieve. Privatization schemes for basic services in different parts of the country have led to worse services and weakened infrastructure. While a centrally planned economy is an inefficient and obtuse solution, government has a clear and important role to play in laying the groundwork in which creative ventures and new businesses can thrive. Government also must play a role in creating the rules, regulations, and taxation that allows people to have the capabilities to engage meaningfully both with the market as well as with civil society.