First, one needs to remember that the New Deal was not the assault on big business that its fans claim. FDR may have talked a good game about going after "economic royalists," and he did love confiscatory personal income taxes. But he and his Brain Trust also loved cartels, big businesses and other "big units" of society. The notion that big business and big government are at war with one another is one of the great enduring myths of the 20th century. The truth is that ever since Teddy Roosevelt abandoned his love of trust-busting, progressives have liked big businesses big, really big. The bigger the business, the more reliable the partner for big government.
That's why any huge corporation that plays ball on health care, or "green jobs," or countless other initiatives, is hailed as a "forward-thinking" or "progressive" company. Companies such as GE, which stands to make billions from Obama's energy proposals, are vital sidekicks in the new era of public-private partnerships. Why is Obama working tirelessly to save Detroit automakers? Because GM is a wonderful poster boy for peddling nationalized health care, and UAW is an indispensable cog in the Democratic Party.
Hillary Clinton's health-care plan required working with large corporations and other firms. It was little guys for whom she had nothing but contempt. When warned her plan would crush smaller businesses, she shrugged, "I can't go out and save every undercapitalized entrepreneur in America."
Again, this is hardly a new story. Chiefly under the auspices of the National Recovery Administration, the New Dealers sought to create huge cartels and trade associations that could work side by side with economic planners. Small and independent firms, from movie theaters to dry cleaners to poultry distributors, were hounded and harassed by a government determined to "rationalize" the economy by sweeping away all those pesky-but-innovative competitors. Would Barney Frank rather work with one giant Fannie Mae that will always take his phone calls and do his bidding, or a thousand smaller firms that would need to be herded like cats? I think we already know the answer.
Everyone agrees that we are spending trillions of dollars on firms "too big too fail." Many of these firms got so big because politicians in both parties liked to have important businessmen take their phone calls, do their bidding and fund their campaigns. And maybe, just maybe, the lesson from the financial crisis isn't to get big business and big government even more involved with each other, but to finally bust the trust between them.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins