by Jesse Lyman

Created on: February 27, 2010

Why is there no cooperation in Washington? Over the years we have heard about “the loyal opposition” and how things got done by “reaching across the aisle”. Television pundits, those who were around at the time anyway, like to fondly look back to Ronald Reagan and Tip O’Neil, working together to fix social security and pass other bits of legislation.

We also hear from former Senators and House Members who shake their heads and make statements regarding the non-sustainability of the current stalemate. So one has to wonder just what is going on here? Are politicians really that stupid? The answer is actually no, not really.

What has happened is that the economy has crashed and we now have to do a restart. That restart involves making a choice about whether to restart using the supply-side policies of the last 30 years or whether to take a “mulligan” on it and to undo them.

Before 1933, the economic system within the United States was pretty well no holds barred capitalism. It had little or no government involvement and was known as “laissez faire” or “let do”. The Country more or less lived by the raw theory of Adam Smith’s invisible hand as discussed in his classical economic treatise first published back in 1776(1).

The ensuing 157 years saw an incredible evolution in his basic theories along with a social one that included consequences Smith could never have imagined. That time span saw bigness - of business, finance, and production - attain levels never before imagined.

With that bigness came unprecedented levels of clout for some while society itself, via growing economic integration and interdependence, became more or less their vassals.

Arising out of all this came phenomena like the company store, the company town, child labor, market manipulation and what at best was a complete disregard for, if indeed even an acknowledgement of, the economic system as being an actual system with consequences for everyone else.

The idea was private ownership was indeed just that and if this led to a small handful having a defacto control over everyone else, well then so be it. Even if that actually stifled the competition that was so fundamental to Adam Smith’s famed invisible hand.

Progressives certainly made attempts to address these issues, included Teddy Roosevelt’s efforts to regulate the “Big Trusts” and Woodrow Wilson’s efforts to break them. However, the First

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