Don’t blame free markets for populist failures

Norbert J. Michel’s column lands squarely in the middle of a recurring economic tug-of-war: are Americans struggling because markets are too free, or because government has too heavy a hand? For many populists, the obvious culprit is corporate consolidation, overseas competition, or a rigged system. Michel flips the script, arguing that the true architects of the cost-of-living crisis are fiscal profligacy and monetary mismanagement—not the invisible hand. It’s a provocative thesis, one that will resonate with free-market advocates but likely frustrate those who see deregulation as the root of inequality. The piece’s central insight is that government intervention has often made housing, healthcare, and energy more expensive, not less. Zoning rules, tariff regimes, subsidy programs, and central bank policy all distort relative prices in ways that disproportionately punish low- and middle-income households. Michel’s point is not that markets are perfect, but that they are being blamed for failures that originate in Washington. This matters because misdiagnosis leads to bad prescriptions—if you think capitalism is the disease, you may demand price controls or wealth taxes, which could exacerbate the very problems they aim to solve. . Yet the column invites a natural counterpoint: have markets truly been “free” in recent decades? Many economists note that bailouts, intellectual property regimes, and regulatory capture have created a form of crony capitalism, where large incumbents thrive while small players struggle. In that light, populist anger may not be aimed at markets per se, but at a hybrid system where government and corporate power intertwine—a system Michel would likely also condemn, though he places more weight on the government side of the ledger. The debate thus becomes less about capitalism versus socialism and more about which institutions deserve the lion’s share of blame for a system that feels rigged to millions of Americans. . What makes Michel’s argument timely is that inflation has cooled from its 2022 peak, yet prices remain stubbornly high, keeping cost-of-living anxieties alive. Voters aren’t economists; they experience the gap between wage growth and rent, groceries, and insurance premiums. Whether that gap stems from pandemic-era stimulus, supply-chain shocks, or corporate pricing power depends heavily on one’s ideological priors. Poli Split’s mission is to let those competing explanations sit side by side, acknowledging that honest empirics can support parts of both stories. Michel’s column strengthens the case for scrutinizing government’s role—but it does not erase the evidence of market concentration in sectors like food retail or pharmaceuticals. Perhaps the most useful takeaway is that both camps share a common enemy: complexity, opacity, and the ability of powerful actors—whether public or private—to shift costs onto ordinary people. . Ultimately, Michel’s essay is a reminder that economic populism, for all its emotional appeal, often rests on a selective reading of history. Free markets have real flaws—externalities, monopoly tendencies, and boom-bust cycles—but attributing every modern grievance to “greedflation” or “neoliberalism” ignores the concrete policy decisions that made housing unaffordable and energy grids fragile. The healthiest response to the cost-of-living crisis may not be to choose sides between markets and the state, but to demand greater transparency and accountability from both. As voters wrestle with these questions, pieces like Michel’s serve a useful purpose: forcing us to ask not just “who is to blame?” but “which levers will actually lower prices without breaking something else?” Source URL: https://thehill.com/opinion/finance/6065121-fixing-cost-of-living-crisis/