Very Expensive Markets
Free markets? Ha. The Republican party, led by the biggest Big Democrat we've had in office since FDR, has made a mockery of the free market. Matt Welch writes for reason, on the magazine's 40th anniversary:
If you want to know when this country's political class, even those hailing from the allegedly pro-market Republican Party, lost faith in the single greatest economic organizing principle ever devised by mankind, look no further than the following six terse sentences from Bush's decidedly unpresidential speech: "I'm a strong believer in free enterprise. So my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly." Italics mine, to highlight the favored lament of reluctant central planners everywhere.Bush's laundry list of horror was not predictive; it was conditional. We could avoid the cruel fate of "a long and painful recession" if and only if Congress agreed right now to allocate around $700 billion more in money it doesn't have so the Federal Reserve could use powers it never previously contemplated to buy up huge swaths of "toxic" mortgage-related financial instruments no bank currently wanted to sell (except to the government, at a premium above the market price). The details weren't important; as House Financial Services Committee Chairman Barney Frank (D-Mass.) said at the start of bailout negotiations, "We don't have a choice now of debating whether this is a good or a bad thing." The elite opinion leaders in Washington and New York were nearly unanimous in their contention that only deeply irresponsible "nihilists" (in New York Times columnist David Brooks' phrase) and the "lunatic fringe" of "wing nuts" and "zealots" (The Washington Post's Dana Milbank) failed to recognize the urgent need for massive yet vague reregulation. "The fine points of financial reform can wait," The Washington Post's editorial board thundered. "For Congress, the immediate task is to avert economic disaster."
...When a Republican administration arbitrarily (and "temporarily") bans short selling just one decade after Malaysian Prime Minister Mahatir bin Mohamad was globally (and deservedly) mocked for blaming his country's self-inflicted woes on "speculators," when a Republican presidential nominee unleashes retrograde attacks against the "casino culture" of Wall Street "greed," and when a Democratic Congress holds nearly daily hearings suggesting any number of "windfall profits" taxes and forced reductions in private-sector CEO pay, that sound you hear is a fragile consensus shattering and a warning bell clanging in the night.
After the collapse of communism and the attendant discrediting of Marxian economic models, the industrialized world more or less settled on democratic capitalism as the best available option for countries to grow and prosper (see "The Libertarian Moment," page 62). Old Europe slashed government involvement in industry, New Europe rode mass privatization to massive growth, East Asian countries went from emergingmarket "tigers" to full-fledged market economies, and China used markets to yank hundreds of millions up from poverty. One could perhaps be forgiven for thinking the 20th century's great economic argument had been settled.
Well, no more.
In June I read what I thought I'd never see again: a mainstream column, by a mainstream columnist (The Washington Post's David Ignatius), arguing against the effects of airline deregulation, one of the most liberating government acts of the last four decades (see "40 Years of Free Minds and Free Markets," page 28). When reregulation is suddenly on the table even for an industry where market forces have cut prices in half while doubling the customer base, it's time to get back to first principles and fight like hell to secure victories we'd long thought won.
I'm hoping the Libertarian party takes a sane pill and puts up a candidate who actually seems electable and/or the Republican party stops being the party of handouts, bailouts and fundanutters and starts being the party they claim to be: the party of fiscal conservatism and small government.
Small government? Ha. At the moment, that's what we call city hall in Wasilla. As we're passing the hat to bail out American Express. American Fucking Express.
The new message of America: Fail big. You'll be worth billions -- in other people's money.
I love that line! "The market is not functioning properly". They really have lost their way.
Charles at November 13, 2008 5:41 AM
BTW, has anyone noticed the Democrats talks about seizing the 401(k) plans?
Democrats Target 401k and IRA Retirement Accounts
The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers' retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.
It would be the Democratic congress that would pass it; but does anyone believe that Obama would veto it?
Jim P. at November 13, 2008 7:11 AM
Holy crap! Is this Latin America???
Charles at November 13, 2008 8:20 AM
That's IT!! I'm taking my money out of my 401k and putting it under my damn mattress! Fuckin' assholes. o.O
Flynne at November 13, 2008 8:34 AM
Amy Alkon
https://www.advicegoddess.com/archives/2008/11/very-expensive.html#comment-1604883">comment from CharlesFewer and fewer people speak English and companies' debt is being nationalized...sure coming close.
Amy Alkon
at November 13, 2008 8:34 AM
All those CEOs aren't socialists, they're just shameless. If Uncle Sam hands over billions to AIG as a reward for being insanely reckless & stupid and driving a once-great company into the ground, then stands on the street corner offering $ 700 billion more, why shouldn't they all get in line for their share?
Martin at November 13, 2008 11:20 AM
"Guaranteed Retirement Accounts" - as if there really was such thing as a guarantee.
I've invested in the market through 401ks, Roth IRAs, etc., for twelve years, and my total portfolio is worth half of what it was a year ago. They will target people like me, promising to restore that value (through government debt). Sickening. How do you think most people will react? Through ideological adherence to free market principles, or the desire for free shit?
It seems I have three options, if such a scenario were to play out:
1) Keep humping away, working my butt off and paying into the system.
2) Work less, or beg my employer not to give me raises, so I don't make enough money to have to pay so much into the system.
3) Move to another country.
Pirate Jo at November 13, 2008 2:40 PM
I'll be brushing up on my Spanish. Either that, or Gaelic. If I can get used to the weather, Ireland looks to be a hell of a lot freer than the US.
brian at November 13, 2008 4:12 PM
I'm hoping the Libertarian party takes a sane pill and puts up a candidate who actually seems electable
I'm afraid that "electable Libertarian candidate" is a contradiction in terms. "Everyone knows" that only the two major parties can win, and that a vote for a third-party candidate is a wasted vote--and thus it becomes a self-fulfilling prophecy.
And even for a major-party politician, adherence to anything resembling libertarian principles gets you branded a nutcase (see Paul, Ron).
I say this not at all happily but with resignation and regret, as I've been a libertarian for about 40 years and a Libertarian since the party was founded.
Rex Little at November 13, 2008 5:54 PM
Well, Ron Paul IS a nutcase.
Anyone who espouses protectionism, isolationism, and xenophobia is a nutcase that I want as far from the levers of power as possible.
And if those elements are part of "libertarian principles" then I will never use that word to describe myself. Not that I do now.
brian at November 14, 2008 6:56 AM
Anyone who espouses protectionism, isolationism, and xenophobia. . .
Protectionism? My understanding is that Paul favors unrestricted free trade. I couldn't find anything on his website that contradicts that. If you can refer me to something that does, please do so. In any case, protectionism is not libertarian.
Isolationism? If wanting to stay out of stupid wars like Iraq is isolationist, we need more isolationism. Libertarians believe in using the armed forces for national defense rather than interfering with countries which haven't attacked us; if that's isolationist, make the most of it.
Xenophobia? Paul wants to close the borders to illegal immigration. Is that what you mean by xenophobia, or do you have something else?
Rex Little at November 14, 2008 6:04 PM
Rex, the impression I get form both Paul and the libertarians is that they are against NAFTA and other free trade agreements.
Paul, at least, also came across as a complete "close the borders" type like Pat Buchanan (as in Buchanan supported his immigration stance which was "no"). Which stinks of xenophobia. And anyway, anyone Pat Buchanan supports must be odious. But the 'official' Libertarian position of completely open borders with unchecked immigration is just as bad as sealing the borders. I've no problem with immigration. But we have rules, and I despise turnstile jumpers.
So far as isolationism, didn't Ron Paul advocate pulling our armed forces from everywhere they are currently stationed? We kept our troops in Europe after WWII to prevent the europeans from having yet another war, and it seems to have worked. And the Iraq war was not stupid. When your enemy is getting material support towards nuclear weapons from various regimes in the middle east, prudence demands that you upset the apple cart. Unless you'd prefer to wait until a chemical or nuclear bomb goes off on U.S. soil to actually do anything about it. Of course, the response to such an act would make the Iraq war look like the Fish Slapping Dance.
brian at November 15, 2008 7:00 AM
I've never seen anything to indicate Paul is against all immigration. The "Border Security" statement on his website includes this: "Legal immigrants from all countries should face the same rules and waiting periods." That implies that he's fine with legal immigration.
The open borders position of the LP is intended as an ideal, to be implemented in a context where the welfare state has been dismantled so that taxpayers aren't subsidizing illegals. (The LP might not do the best possible job of making this clear.) Until this happens, I think most libertarians approve of border security.
As far as the armed forces are concerned, I think you understand Paul's position correctly. I'll merely say that I agree with him and disagree with you, but I don't think either of us has reason to label the other a nut.
Rex Little at November 15, 2008 12:40 PM
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