By David Asman
Published August 13, 2010
Hold on to your hats. The White House is using its summer break to cook up another round of major government meddling in the economy. That's because they're panicking.
We first talked about panic setting in at the White House a couple of months ago. Now it's reaching a fever pitch. And here's why.
The folks in the White House are true believers. They really believed that bigger government could solve our economic problems. So when businesses didn't start hiring after the huge, trillion- dollar stimulus bet, there was massive confusion. But since they are true believers, they're not going to stop. They're going to spend even more…or try to. And as bad as things are now, they could get much worse if the administration doubles down on its bet on big government. That's not to say that we don't need a radical solution. But we've got a different radical in mind.
Our radical is Ronald Reagan. When Reagan became president, he radically altered an economy that was at least as bad as the one we're in right now. He pushed back the expansion of government that preceded him in the Carter years. He didn't believe that Carter's creation of a new Department of Education would improve our kids' test scores or make our schools more efficient, and he was right. He didn't believe Carter's claim that a new Department of Energy would help wean us off of foreign oil, and he was right. He believed in a safety net, but not one that suffocated growth or innovation.
Most of all, Reagan had the same radical view of government that our founders had: That government is the problem, not the solution; that policies should be developed to keep government out of our lives, not give government control over our lives; that the way to turn our economy and our spirits around was to put our faith in the individual, not the state.
So he cut regulations and cut tax rates dramatically...and as soon as the tax cuts kicked in, we had seven straight years of extraordinary economic growth. Between 1982 and 1989, 19 million new jobs created -- and we're not talking "created and saved." These were 19 million net new jobs. And most of the new jobs were created by innovative new companies with amazing new products, companies like Apple (AAPL: 245.77 ,0.00 ,0.00%), and FedEx (FDX: 81.45 ,0.00 ,0.00%), and Microsoft (MSFT: 24.22 ,0.00 ,0.00%). These companies took off like flowers in the desert after a rain storm. As Reagan said in his second inaugural address:
"There are no limits to growth and human progress when men and women are free to follow their dreams."
That's the kind of radical vision we need now. Not one based on models that failed us in the '30s, but based on the policies that turned our economy and our spirits around in the '80s