Wednesday, December 31, 2008

Quote of the Day

Before you can declare free markets a failure, you have to establish that they exist.
- Paul Kasriel, chief economist at Northern Trust Co. in Chicago

A combination of “chosen people” who fix interest rates, an army of regulators (particularly in the banking sector) and compromised overseers (see: Fannie and Freddie campaign contributions to members of Congress) belie the reality of a truly free market.

Free market capitalism has its flaws and chief among those and one that will never be solved, cured or “regulated” is that at the epicenter of all free market enterprise is the inherently flawed human being. His judgement, his ambitions and his desires all for better or worse determine his economic fate and taken collectively with all the other players determines the fate of the larger economy.

And for all these flaws, capitalism has been the only economic system to lift millions out of poverty as a “direct consequence of government stepping out of the way.”

But now, people like Arianna Huffington are cheering the death of laissez-faire capitalism (quick side note: she, of course, sites that New York Times article which laid primary blame for the financial crisis at the feet of the Bush administration. Fair enough. That’s their prerogative but any serious piece that investigates the cause(s) of the crisis and fails to note Congressional ineptitude and malfeasance is guilty of negligence and disingenuousness and thus any person who would cite this article to back-up any of their own contentions lacks a seriousness of their own).

… and Paul Krugman is gleefully rubbing his hands together as the impending expansion of government under Obama is a perfect opportunity for “good government” as if good government was some sort of end-state rather than a utilitarian means to protecting property and the coasts. And how the growth of federal government is an opportunity for it to become more transparent, more efficient and less susceptible to graft and corruption is lost on us.

Allowing bad business models to survive and bad judgement to go unpunished via the bail outs and a $1 trillion stimulus plan which will most certainly be riddled with pork and which because of its centralized nature will certainly entail a massive misallocation of resources, will not improve our economy but certainly hinder it all in the name of avoiding (short term) pain.

It defies logic but demands an explanation.

1 comment:

B-Daddy said...

Great post, you've been linked.