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GOP Congress Should Defend Economic Freedom to Restore Prosperity

The opinions expressed by columnists are their own and do not necessarily represent the views of

With control of congress, Republicans could push to lower taxes and repeal the Affordable Care Act, but President Obama has the veto. Instead, a new GOP majority could launch an all-out assault on federal abuses of regulatory powers to defend economic freedom and restore prosperity.


The American economy always had plenty of government meddling. However, for the first century of the republic, states, cities and towns did most of the regulating, applying common law principles regarding public safety and fairness.

Initially, markets were mostly local, and democratic process close to the people ensured accountability limited abuses.

After the Civil War, the telegraph and railroads connected the two coasts, and broader continental markets and national enterprises with monopoly power emerged.

The Interstate Commerce Commission was established in 1887 to curb discrimination in railroad freight rates, and the Sherman Act in 1890 asserted federal antitrust authority to ensure fair pricing across the entire economy.

Nowadays, however, it seems the Federal government regulates and insidiously monitors virtually everything that citizens and businesses do, even when competition would suffice to compel socially responsible behavior.

Houses are built in small local clusters, yet the federal government regulates toilets, hot water heaters, light bulbs, air conditioners, windows, and insulation, even though manufacturers and builders compete for buyers by touting the energy efficiency of their products.

Fuel economy in the auto industry was rising before Obama imposed new, higher mileage standards, because customers were demanding improvement.

Washington now compels health insurance, limits choices to four plans and only from a few companies willing to do business on each local exchange.


Federal rules are manipulated to benefit friends of presidents and powerful members of congress. For example, Comcast CEO Brian Roberts is a major Democratic fund raiser and Obama golf buddy. He will likely get a merger with Time-Warner, even though a less harmful combination between Sprint and T-Mobile was nixed by federal regulators.

The federal income tax enacted in 1913 was fairly simple and non-intrusive but has become grotesquely complex. It discourages all kinds of commercial behavior and encourages others—in no small measure thanks to political manipulation. For example, the Treasury recently decided that telecom wires are real estate, and thereby subject to special treatment and lower tax rates, which will boost profits for Comcast.

Federal tax rates would be prohibitively high but for deductions and credits. Accessing those, however, requires millions of citizens and small businesses to chronicle the details of their everyday purchases, movements and donations.

The administration doesn’t need to dump cell phone records to track our movements and political activities—it’s got income tax returns—and overzealous IRS employees to persecute folks who don’t share the president’s views.

Civil liberties aside, all this distorts—and generally gums up—economic decisions, raises costs, and focuses enterprises on compliance instead of innovation.

No surprise money spent on lobbying and political campaigns increases more rapidly than productive investment. The best way to grow a business in America is to get the tax laws and regulations written to advance its strategic plan.


This overreach and abuse scaled up when the GOP captured control of the congress during the Clinton administration, and the president read federal statutes aggressively and pursued enforcement to end run the legislative branch.

No surprise, after growing at a 3.4 percent pace through 2000, GDP has since slowed to only 1.7 percent—and median family incomes began falling, poverty rising and inequality worsening.

A GOP congress may not be able to roll back Obama’s executive orders, but it could initiate a broadside of hearings to cast sunshine on these follies, and cut the budgets of the agencies prosecuting this tyranny.

Ask Detroit, nothing drives change like a shortage of cash.

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and a national columnist. He tweets @pmorici1

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