In the wake of several colossal free-market failures, why is anti-regulatory ideology enduring as well as it is?
The past decade has been rife with spectacular examples of free markets going terribly wrong. There was the California energy crisis of 2000-2001, the various corporate scandals of the early Bush administration, soaring health insurance premiums, and the 2008 financial crisis. And now we have the horrendous Gulf oil spill. All of them could have been prevented had we applied prudent government intervention instead of backing off and waiting for the “invisible hand” to work its magic — magic that, we learned, failed to save the day in these particular scenarios.
In spite of all this, there’s a very loud movement on the political right that continues to insist that markets are (almost) always right and regulation is (almost) always wrong. In fact, market fundamentalism is enjoying a resurgence in popular attention, if not in its ranks.
The tea party movement has marked a major shift in U.S. conservative politics: For the first time in many years, economic ideology is center stage, as opposed to the “culture war” or foreign policy. Glenn Beck’s program on Fox News came out of nowhere in early 2009, and by the fall, more than 2.5 million people were tuning in every day — less than a million behind Bill O’Reilly and actually beating him on a few individual dates. However, unlike O’Reilly, Beck’s emphasis is on libertarian-conservative economics while O’Reilly is surprisingly moderate on this issue. Beck’s surge in ratings reflects a new issue prioritization: Forget about gay marriage or al-Qaida — if you’re a right-winger, the real threat today is socialism, socialism, socialism.
Why is it that now, of all times, the economic right is regaining prominence? 
Part of it could be that its disciples are going through a kind of grievance procedure. The acceptance process never comes easily, especially when it requires a fundamental shift in attitudes and beliefs that threatens one’s sense of pride and ego. In addition, some of the anti-government vehemence could involve closet racism and a general fear or hatred toward modern cultural values. Right-wing ideology provides a nice cover not only for public relations, but for people who are afraid to admit to themselves that they have a bigotry problem.
But I also intuitively feel that much of the opposition is being driven by those special interests who have done very well under an anti-regulatory climate and who have a huge amount to lose should there be a paradigm shift. If you make a living off of financial sorcery or oil drilling, a leftward shift in political economics is your worst enemy, and you should do everything possible, clean or dirty, to prevent such a shift from happening.
One of the best ways to do that today is to fund K Street lobbyists who will give you more leverage on Capitol Hill, as well as campaigns for candidates with big-business agendas.
Facts about corporate political contributions over the past couple years support this theory.
Since 2008, most industries have not only ramped up political spending dramatically, but a larger share of that spending is going toward Republican candidates relative to Democratic candidates. As Paul Krugman pointed out earlier this year, financial industry donations shifted from 53 percent Republican in 2009 to 63 percent so far this year, and the securities industry, traditionally slightly on the Democratic side, is now leaning to the GOP.
When it comes to lobbying, the national industry had a 2009 gross value of $3.47 billion,.
And the recent Supreme Court ruling on Citizens United, which overturned many campaign finance restrictions, can only intensify their crusade to buy out Washington. You don’t have to actually finance campaigns in many cases — the mere threat of such an action can often beat incumbents and challengers into submission.
A closer look at not only lobbying and campaigns, but media content, education curriculum, and the overall role of propaganda in shaping societal attitudes even within democratic societies, reveals fascinating, terrifying facts about plutocracy in contemporary America, and just how rampant it has become. (One of the most blatant examples of corporate-led propaganda today is the global-warming skepticism movement, most of whose funding comes from fossil-fuel companies.)
Another tell-tale fact is that big business is very hypocritical and will enthusiastically support government intervention if it helps their bottom lines. An adventure into the world of economic power couldn’t possibly fit in a single article and would likely make for a good ongoing series.
What we can conclude, however, is that in a nasty crisis era, obsolete and grossly faulty economic ideas are rampant and command tremendous authority. If you’re a practical idealist who cares about the country’s economic future, this is definitely not a fun dragon to fight. About the only solace I can personally draw from this is that perhaps I can see the dragon’s finer features a bit more clearly now.