Saturday, December 6, 2008

Don't Sweat the Small Stuff 4

On Your Feet...
In a piece for the Telegraph, Iain Martin exhorts capitalists to get off their knees:
Is this how capitalism ends, not with a revolutionary bang but a whimper? A culture war has been launched against free markets and so far the hostilities have been astonishingly one-sided: those of us who believe in the power of competition as the most powerful engine of human improvement have barely raised a protest.

I don't agree with the idea that competition is "the most powerful engine of human improvement". The engine is the human mind, and more precisely, the free human mind. But this is a minor complaint, as Martin concludes with a quote from Ayn Rand.

However, in the middle of the article Martin says that
Yes, markets require regulation...

Much of the poverty in this country originates not from failures of capitalism, but from the over-interference of government in the economy and civil society. The most obvious examples of this can be found in the growth of welfarism and in the maintenance of an education system that is insufficiently responsive to the demands of consumers. We need more of the free market, not less. [emphasis added]

So, while exhorting capitalists to get off their knees, Martin simultaneously argues that some regulation is needed. The problem isn't government interference, he says, the problem is "over-interference". But it is precisely government interference, or the threat of it, that has driven Wall Street, the Big Three, and others to their knees to beg for government assistance. By abandoning the moral right of individuals to be free of government interference, Martin undermines his entire argument.

...Or on Your Knees...
The Wall Street Journal reported on Thursday that
The executives of the Big Three auto makers said Thursday they would be willing
to work under the supervision of a federal oversight board as a condition for
receiving financial aid from the government.

This is precisely what happens when businessmen accept government regulations and interference. Rather than name the real culprit--clean air regulations, safety mandates, and outrageous union contracts are a few--the Big Three would rather crawl on their knees and cozy up to the government teat. Having accepted government interference in their businesses, they cannot even recognize "over-interference".

...And Then Bow Before King Frank
Times of crisis are often used by power lusting politicians to expand their control over the lives of their subjects. The Wall Street Journal reports on a talk given by Barney Frank this past week:
House Financial Services Chairman Rep. Barney Frank (D., Mass.) predicted that 2009 will be the "best year" for public policy since the New Deal.

Speaking before the Consumer Federation of America Thursday, Mr. Frank said Congress would pass a regulatory overhaul comparable to the antitrust laws of the late 19th century and the creation of the Securities and Exchange Commission in 1934.

Democrats will tighten consumer protections for credit cards, put "very tough rules in" to govern subprime lending and give "appropriate liability" to the institutions that securitize mortgage loans, he said.

The SEC, the Fed, and the numerous other agencies and departments were created explicitly to prevent the type of economic issues we are now facing. But Barney and his friends on Capital Hill could care less about the fact that their interventionism caused the current mess. Because as Rahm Emanuel, the new Chief of Staff for Barack Obama has said, "You never want a serious crisis to go to waste." That would mean wasting an opportunity to expand their power over the economy and the lives of individuals.

May I? Please! Please! Please!
On Friday, European Union antitrust regulators gave approval to Bank of America to purchase Merill Lynch. reports that US regulators gave their approval in October. It is bad enough that an American business needs to have the approval of anyone to purchase another company. But now Americans must also cull favor with Europeans. I know this isn't new, and it will likely get worse as Obama works to make America more likable in the eyes of the world.

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