Hands Off: Why the Government is a Menace to Economic Health

Rejecting the assumption that government policy can decisively help to build a healthy, growing economy, Lee, New York Times Op-Ed page deputy editor, challenges what she thinks is the conventional economic wisdom in this prickly broadside. Misplaced faith in government activism, she argues, had its origins in the Keynesian policies of the Kennedy administration. It seemed to work in the early 1960s only because of fortuitous coincidences such as an expansion of the global economy. To support her central thesis that government intervention in the economy creates uncertainty, promotes short-term thinking and leads to over-regulation, Lee uses selective examples such as the Reagan administration's response to the 1987 stock market crash, the luxury tax of 1990, regulation of health care and the food industry and the Byzantine federal tax code. Paradoxically, she asserts that zero inflation could be achieved with relative ease if the Federal Reserve pegged the growth rate of the money supply to growth in the real economy. Although she strikes a contrarian pose, Lee herself fits right into the mainstream of free-market orthodoxy. (Apr.)