News Analysis: Americans may be losing faith in free markets

Things are hard all over the financial landscape, and politicians and experts are now looking with favor at more, not less, government involvement in the economy.

By Peter G. Gosselin
Los Angeles Times Staff Writer

July 16, 2008

WASHINGTON — For a generation, most people accepted the idea that the core of what makes America tick was an economy governed by free markets. And whatever combination of goods, services and jobs the market cooked up was presumed to be fine for the nation and for its citizens -- certainly better than government meddling.

No longer.

Spurred by the continued housing crisis, turmoil in financial markets, spiking oil prices, disappearing jobs and shrinking retirement savings, the nation and its political leaders have begun to sour on the notion that the current market system is the key to a fair, stable and efficient society.

"We're at a hinge point," said William A. Galston, a senior fellow at the Brookings Institution in Washington who helped craft President Clinton's market-friendly agenda during the 1990s. "The strong presumption in favor of markets, which has dominated public policy since the late 1970s, has been thrown very much into question."

Now, to a degree not seen in years, politicians and outside experts are looking with favor at more, not less, government involvement in the economy.

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