In the category of things found while looking up other things, here’s an interesting front-page piece in Wednesday’s Los Angeles Times, “Americans may be losing faith in free markets.”
The writer, Peter G. Gosselin, quotes several experts, including Kevin Hassett, at the American Enterprise Institute.
William Galston of the Brookings Institution in Washington says, “We’re at a hinge point. The strong presumption in favor of markets, which has dominated public policy since the late 1970s, has been thrown very much into question.”
Even the American Enterprise Institute’s Hassett concurs in the existence of the backlash. “There may be a backlash against markets at the moment,” he says, though he goes on to say he doesn’t see any alternative view of how things should work.
They cite the convergence of issues: a housing meltdown that resulted from an unregulated corner of the mortgage market (high-risk loans), the price of gasoline (generally blamed on the laws of supply and demand and oil market speculation), disappearing U.S. jobs and worries about retirement investing based on the assumption the stock market will always rise.
“We’re [he means Americans] not ready to throw out markets altogether,” says economist Robert E. Litan of the Brookings Institution and the Kauffman Foundation of Kansas City, Mo., “but we want government to do something about the excess.