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HANDS OFF by Susan Lee


Why the Government Is a Menace to Economic Health

by Susan Lee

Pub Date: April 15th, 1996
ISBN: 0-684-81442-0
Publisher: Simon & Schuster

A laissez-faire economist's back-to-basics restatement of the case against Washington's active involvement in commercial affairs. In providing what amounts to a people's guide to the unfortunate outcomes of government intervention, the author (Susan Lee's ABZs of Economics, 1987) focuses on the American economy decade by decade during the period 196095. First, however, she offers a series of short, lucid takes on ways in which Big Brother has gummed up the works in the recent past. Examples range from the stock market crash of 1987 through the substantive costs of pervasive regulation, the uncertainties created by constant changes in fiscal (i.e., tax) policy, the loss of purchasing power caused by double-digit inflation, and the impact of budget deficits on capital as well as credit markets. In Lee's book, Keynesians are most to blame for the perdurable delusion that government can make a decisive economic difference on the upside (e.g., by keeping unemployment low, moderating swings in the business cycle, and otherwise providing shelter from the storm). But the heyday of fine-tuning advocates, Lee points out, was during the 1960s, a decade that, with postWW II expansion of trade and other factors, would have produced spectacular growth no matter who was at the wheel. The author goes on to note that the promise of managing the economy has bipartisan appeal, as attested by the unavailing efforts of Richard Nixon, an avowed conservative, to solve trade and domestic problems with wage/price controls. His White House successors, Lee argues, have fared little better; indeed, with occasional assistance from OPEC, natural disasters, and election- minded legislators, chief executives have precipitated more calamities (stagflation, unanticipated recessions, et al.) than recoveries. The wisest course, Lee concludes, would be for the voting public to accept less government and more responsibility. An informative primer with an attitude.