Fencing In The Wild, Wild Financier

The credit crunch has hit our libertarian/neo-con free marketeers where it hurts, in the wallet. While there are still injunctions from the Ayn Rand loyalists to let the bodies fly, it's all good, when losses worldwide are mounting, reality has hit us all hard.

The Eat Thy Brother Doctrine fails from a simple equation. Beggaring the consumer cuts 'way into profits. Our laboring class has turned into a third world country right here at home, while our capitalists are still expecting civilized country's profits. It doesn't make sense, in addition to being rotten morally.

For more than a quarter-century, the dominant idea guiding economic policy in the United States and much of the globe has been that the market is unfailingly wise. So wise that the proper role for government is to steer clear and not mess with the gusher of wealth that will flow, trickling down to every level of society, if only the market is left to do its magic.

That notion has carried the day as industries have been unshackled from regulation and as taxes have been rolled back, along with the oversight powers of government. Faith in markets has held sway as insurance companies have fended off calls for more government-financed health care, and as banks have engineered webs of finance that have turned houses from mere abodes into assets traded like dot-com stocks. For more than a quarter-century, the dominant idea guiding economic policy in the United States and much of the globe has been that the market is unfailingly wise. So wise that the proper role for government is to steer clear and not mess with the gusher of wealth that will flow, trickling down to every level of society, if only the market is left to do its magic.

That notion has carried the day as industries have been unshackled from regulation and as taxes have been rolled back, along with the oversight powers of government. Faith in markets has held sway as insurance companies have fended off calls for more government-financed health care, and as banks have engineered webs of finance that have turned houses from mere abodes into assets traded like dot-com stocks.

But lately, a striking unease with market forces has entered the conversation. The world confronts problems of staggering complexity and consequence, from a shortage of credit following the mortgage meltdown to the threat of global warming. Regulation – nasty talk in some quarters, synonymous with pointy-headed bureaucrats choking the market – is suddenly being demanded from unexpected places.
(snip)
But when things go wrong, demands grow for the government to step in and make them right.

"Untethered market forces lead to bad things," said Mr. Bernstein of the Economic Policy Institute. "You simply can't run an economy as complicated as ours on ideology alone."

While we all know there will be screams about making Amerika uncompetitive in the world market, the proof is in the puddin'. Following the tax cut for the rich, send the jobs offshore, fantasy has failed to make that great economy it was supposed to produce. The rich are richer, but their dollars are going south, investments losing value.

Their free market philosophy has failed the right wingers - and the whole world is losing along with their ill gotten gains.

A rational economic policy would be refreshing, but with the administration proposals I posted yesterday, it doesn't look likely until January 20, 2009.