Bush Cautious of Regulatory Intervention in Capitalist Economies

President Bush admits the need for economic reform, but emphasizes the importance of keeping capitalism alive and well.

American writer and activist Barbara Ehrenreich once had this to say about capitalism: "That's free enterprise, friends: freedom to gamble, freedom to lose." In the last days of his reign as president, George Bush is arguing to protect that freedom-even as our country is facing the worst economic crisis since the Great Depression.

Public support fading

Capitalism and President George Bush have something in common these days-both seem to have lost quite a bit of stature in the public eye. Recent polls conducted by CNN/Opinion Research and USA Today/Gallup peg Bush's approval rating at 24 percent and 28 percent, respectively.  A phone survey conducted by Rasmussen Reports indicates that two groups of U.S. citizens aren't so happy with our capitalist economic system either. According to the survey, only 38 percent of senior citizens, and 35 percent of those under age 30, believe that capitalism fosters prosperity.

Given his own sinking reputation, President Bush isn't the most effective spokesman for capitalism-but he's assigned himself the task nonetheless. Concerned that the current economic turmoil will usher in an era of excessive government regulation, the president recently stood up to defend the merits of the free market system.

Reform is one thing, reinvention another

During a speech at the Federal Hall National Memorial in New York, Bush called for economic reform, while warning against a comprehensive overhaul of capitalism. He freely admitted the need to update financial systems, and to improve regulation of markets, firms, and financial products.

"In addition to addressing the current crisis," Bush explained, "we will also need to make broader reforms to strengthen the global economy over the long term." Some of these reforms should be geared towards creating greater transparency in the financial markets, and improving the integrity of those markets. Other reform efforts should be focused on modernizing the International Monetary Fund (IMF) and the World Bank, so that these entities can better address today's economic circumstances.

Taking the bad with the good

While improved securities and banking regulations might be a good thing, other transformational efforts may go too far. "History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market," Bush explained. He reminded his audience that capitalism has proven itself to be the most effective economic system for building wealth over the long term. Should reform efforts clip the wings of capitalism, he warned, it would limit the economic opportunity available to citizens of the U.S. and other free market countries.

In short, Barbara Ehrenreich says that capitalism represents the freedom to lose, while George Bush says it represents the freedom to win. From here on out, it will be up to Bush's successor and other world leaders to determine how to balance those two sides of the capitalism equation.