Written by Dan Amoss for Laissez Faire Today.
All government-directed economic activity grows at the expense of the private sector. And the election suggests that government coercion will drive even more U.S. economic activity in the future. This is a shame, because freely adjusting prices, competition, and innovation elevate living standards. Mandates, price controls, and subsidies — coercive actions — depress living standards. Quality falls. Shortages develop and persist.
Americans are in the midst of a destructive, self-reinforcing political cycle — a cycle that might conclude in a nightmare scenario. A sloppy diagnosis of the financial crisis lies at the root of the destructive cycle.
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