The Return of Madcap Capitalism

By Robert Parry
May 14, 2010

For much of the post-World War II era, there was a broad consensus that well-regulated capitalism – paired with an effective public sector – was the economic model that worked best, especially compared with the Soviet Union’s heavy-handed central planning or the madcap capitalism that had led to the Great Depression.

The harsh Soviet approach failed to meet basic consumer needs, and laissez-faire capitalism was too susceptible to the boom-and-bust cycles that brought on the Great Depression. President Franklin Roosevelt’s New Deal had charted a middle course that let capitalists make money producing and selling products while the government constrained capitalism’s worst excesses.

In the 1950s and 1960s, President Dwight Eisenhower’s Interstate highway system and John Kennedy’s space program also showed how smart government programs could help create an infrastructure to spur economic growth. Tax rates on the wealthy were relatively high in those days, but an expanding middle class was generating an unprecedented national prosperity.