July 2019

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« What I Said in the Spring | Main | Hard to Get Anything Done with Divided Government »

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Hear, hear! Especially your last point. No one would be blaming this current mess on Al Gore's or John Kerry's "laissez-faire-hate-the-government" philosophy.

The point about GOP playing lip-service to free markets is dead on, and why I have been hoping Obama wins over McCain (but don't plan to vote for either). I have thought for a few years now that the Republicans have done much harm to the cause of liberty specifically because of this point.

Any chance the bill might be found unconstitutional by the supreme court?

A lot of my friends are repeating the Washington D.C. "We need stronger/more regulation." I'd like to answer them with specifics, but I don't know exactly.

The best explaination I've heard comes from Yves Smith: Magan Mcardle interviews Yves Smith:

http://bloggingheads.tv/diavlogs/14850

What Yves is suggesting is that the government credit rating agencies, the SEC, the entire regulatory structure is part of the problem, and as is, it can’t “fix” anything because it’s part of the problem. Worse, because the “mixed” system (i.e., the credit markets and government regulation) is a ‘tight-coupled’ complex system, the unintended negative consequences of any government intervention and new regulation will overtake and overwhelm any “good” the intervention and regulation was designed to do.

If she’s right (and I think she is), the invention will make things worse in a way that can only be understood after the fact. It’s better to let the system “as it” find its own way to a new equilibrium, which is sort of what’s happening now (bank failures and mergers) but the bailout is throwing uncertainty and hesitation into the process. There is a role for government, and there are lots of helpful things it could do, but they’re small and targeted, and the Bush Administration, which is pushing the bailout through fear-mongering, is not in the mood, for whatever reason, to take the time and effort to work out those details: they’re pushing this exactly the same way they pushed Iraq.

However, I think this type discussion is too academic & vague and it would just go over most people's heads.

If regulation and intervention really caused the problem, or made an existing problem worse, what's the simple straightforward and specific story?

John Bird and John Fortune (the Long Johns) hilariously describe their idea of the mindset of the investment banking community in one of their satirical interview. Of course, they make all the market players seem like greedy idiots, and I think it's how people see the crisis -- their "story" is easy to understand and, even though it's satire, it makes a kind of sense, a kind of sense that leads one to think "yup! we need more/stronger regulation:"

http://www.youtube.com/watch?v=mzJmTCYmo9g


~ Best,
Charters Of Dreams

Charters,

See this: http://myslu.stlawu.edu/~shorwitz/open_letter.htm

Let's be a little too cozy for our own good and lay the end of the depression at 1941. Rothbard's history of said appeared in 1963. That's 22 years before a sound Austrian analysis hit the presses. There was no organized Austrian movement back then. Let's see when this monster comes to wraps, how long it takes for an analysis of equal lucidity, scholarship and most of all forceful argumentation to come to the fore from the Austrian School. I really hope the job gets done much faster.

Steve,

I agree that lip service paid by republicans towards free markets does harm rather than good. But I'm unsure (not in disagreement, just remain in uncertainty) that that harm is less than the potential harm that could be caused by an Obama administration given the green light to fix the economy.

Now these harms are obviously of different types. One is harm done to the image and narratives of liberty and markets and its subsequent effects upon the economy. The other is the more direct effect of economic planning. It seems that to make the point you're trying to (which might be right and I'm interested to entertain) you have to believe that total economic collapse and reconstruction is closer at hand than is an ideological victory for liberty and markets.

Do you agree, am I missing something, or misinterpreting?

Not quite Dan. I think we're likely in for a bad stretch (not a total collapse) for the next bit and I'd rather the blame for that went to the folks not known for even paying lip service to free markets.

Excellent overview Steve. Just wanted to let you know that we linked to this post on the "Intellectual Ammo" portion of our "Crasher Challenge 2: Set the Record Straight on the Socialist Bailout".

Keep up the good work.

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