Democrats' economic views saved the day

Prospects are not looking too peachy for Democrats this election season. President Barack Obama and Democrats in Congress are getting tarred by the nation's entrenched unemployment and the cost of efforts to reverse the damage. I can understand the malaise that afflicts a nation with close to 15 million people unemployed and millions more underemployed. But the blame is being put in the wrong place. The next election should be a contest over which economic world view — laissez-faire or Keynesian — turned out to be the better one, and on that score the Democrats should win.

Deregulation got America into this mess — decades of it — the kind of laissez-faire economics enacted by the Chamber of Commerce, former Federal Reserve Chairman Alan Greenspan and Republican leaders. America barely survived life under their tie-regulators-hands approach to markets. Wall Street sucked up the wealth in this country, hollowing out our productive sectors, while bankers got drunk on risk. It was only after $17 trillion in American household wealth was wiped out in 18 months that Greenspan acknowledged how bankrupt his views were.

Yet even after this painful object lesson, Republicans in Congress stood nearly united against financial reform. "This is killing an ant with a nuclear weapon," House Republican Leader John Boehner said in his smackdown of a measure that others, including former Fed Chairman Paul Volcker, thought wasn't tough enough.

So the Great Recession was brought to you by deregulation. But thankfully we avoided economic dislocation on a scale equal to the 1930s through the Keynesian federal bailout and stimulus programs, the very initiatives that Republicans are demonizing in the run-up to the midterm elections. The Utah GOP even branded one of their own "Bailout Bob" (U.S. Sen. Robert Bennett) and denied him a fourth term because he voted for the TARP funds.