Michael Barone

Those seeking that outcome would do well to study some history. Some New Deal-Great Society programs have mostly worked well over the long term: bank deposit insurance, securities market regulation. Some worked well for many years but are on the road to something like financial collapse: Social Security, Medicare. But some had adverse economic effects and proved unpopular: high taxes on high earners, industrial unionization.

The economy in the 1930s suffered from what Amity Shlaes in "The Forgotten Man" calls a "capital strike," with unemployment stuck over 10 percent. Take a look at the polls in the 1940 election. If voters had decided on domestic issues, the Democrats probably would have lost. Franklin Roosevelt won because Adolf Hitler, with his then-ally Joseph Stalin, had conquered most of Europe and was threatening Britain and the United States. Roosevelt's experience and his steady hand on foreign policy won him his third term.

The war that followed produced huge economic growth and sharp increases in income equality -- the biggest such movement in American history. But the war policies -- government taking up nearly half of gross domestic product, the mobilization of the equivalent of 37 million in the military -- are not replicable under any circumstances foreseeable today.

Postwar America continued to grow, with help from the John Kennedy tax cuts, declining unionization and (I would argue) the civil rights acts. But eventually, in the 1970s, regulation designed to freeze a static economy in place and macroeconomic policies complacent about the danger of inflation (the big problem in the 1930s was deflation) produced the gas lines and stagflation voters rebelled against. Policies inspired by the inflection point of the 1930s led to a different inflection point in the 1970s.

Are we looking at another inflection point today? Maybe so. Reviewing the long course of history, I think it's obvious that market capitalism, together with the rule of law, hard currency and regulations that ensure transparency and accountability, has produced bounteous growth and the resources to address problems that require government action, like defending the nation and protecting the environment. But voters tend to consider only the history they know. They might do well to look back a little further.

Michael Barone

Michael Barone, senior political analyst for The Washington Examiner (www.washingtonexaminer.com), is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and a co-author of The Almanac of American Politics. To find out more about Michael Barone, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com. COPYRIGHT 2011 THE WASHINGTON EXAMINER. DISTRIBUTED BY CREATORS.COM