How "Free Markets" Defame "Democracy"

This week, the White House declared that the evidence of any coup-plotting is either fabricated or implausible, as the New York Times reported. President Barack Obama then cited what he called "an extraordinary threat to the national security of the United States" from Venezuela and froze the American assets of seven Venezuelan police and military officials.

The fact that Obama can deliver that line with a straight face should make any future words out of his mouth not credible. Venezuela has done nothing to threaten the "national security of the United States" extraordinarily or otherwise. Whatever the truth about the coup-plotting, Venezuela has a much greater reason to fear for its national security at the hands of the United States.

But in this up-is-down world of Official Washington, bureaucrats and journalists nod in agreement at such absurdities.

A few weeks ago, I was having brunch with a longtime State Department official who was chortling about the pain that the drop in oil prices was inflicting on Venezuela and some other adversarial states, including Iran and Russia.

I asked why the U.S. government took such pleasure at watching people in these countries suffer. I suggested that it was perhaps more in U.S. interests for these countries and their people to be doing well with money in their pockets so they could shop and do business.

His response was that these countries had caused trouble for U.S. foreign policy in the past and now it was their turn to pay the price. He also called me a "Putin apologist" when I wouldn't agree with the State Department's line blaming Russia for all of Ukraine's ills.

But the broader question is: Why does the United States insist on imposing "free market" rules on these struggling countries when Democrats and even some Republicans agree that an unrestrained "free market" has not worked well for the American people? It was "free market" extremism that led to the Great Depression of the 1930s and to the Great Recession of 2008, the effects of which are only now slowly receding.

Further, real democracy -- i.e., the will of the majority to shape societies to serve the many rather than the few -- has turned out also to be good economics. American society and economy were arguably strongest when government policy encouraged a growing middle class from the New Deal through the 1970s.

To be sure, there were faults and false starts during those decades, but experiments with an uncontrolled "free market" have proven catastrophic. Yet, that is what the U.S. government seems determined to foist on vulnerable countries whose majorities would prefer to make their societies more equitable, more fair.

And beyond the negative social impact of the "free market," there is the danger that conflating policies that cause economic inequality with democracy will give democracy a very bad name.