Posted by
Andrews on Wednesday, June 11, 2008 2:28:02 PM
In the comments responding to
Michele Malkin's column today, one poster indulged in one of thsoe idiocies I mention regularly, blaming deregulation for something the government caused. Here is his post:
I wrote on this before, but let me say it again, the
subprime crisis was created by
GOVERNMENT INTERVENTION. The state has forced lenders to give loans to high risk customers, which inevitably caused a crash. Not to mention the artificially low interest rates which encouraged excessive loans.
But, as usual, thanks to a partial deregulation, the
free market is being blamed for the failure of the
remaining regulations. As if the fuilly regulated banking system of the 1970's was doing so much better.
POSTSCRIPT
I won't even mention the absurd pro-FDR propaganda which makes of FDR's
Keynesianism a virtue and his love of regulation a safeguard of freedom. Hopefully my readers are well aware of the truth of the FDR administration, and the silly myth that he somehow got us
out of the depression.
POSTSCRIPT II
By the way, that final sentence about UBS makes me think that US prosecutors are abusive more than that UBS is a criminal enterprise. And, anyway, what on earth does it have to do with the rest of the post? It sounds like standard liberal scattergun argument: "He robs, cheat and steal from his client. Oh and he hit his wife!" What possible relevance does UBS's legal woes have to do with either Gramm's deregulation or McCain's VP committee? Why is it whenever many on the left engages in criticism, they cannot stay on point, but have to throw in unrelated personal slanders?
By the way, in the interest of disclosure, I have always been quite a fan of Gramm, and supported his ill-fated presidential run. It does not mean I would overlook misbehavior however. But in this case, I just don't see it. The subprime "crisis" is the outcome fo bad government policies, pure and simple, and non have to do with deregulation.
POSTSCRIPT III
I hate to keep beating a dead horse, but every time I read this again, I notice yet another problem.
If UBS lost money in the subprime "crisis", then why would they want MORE deregulation? Wouldn't they want to try a different approach? If the deregulation caused them losses, then how is it going to
make them rich?
(Actually, I see this a lot, conspiracy theory types who talk about how much money a company lost, but then act as if the law somehow made them rich. You can't have it both ways, either they are losing money or making money, the two are mutually exclusive. Kind of like the theory that
somehow speculation is driving up oil prices while, where in every other area it serves to level prices. Somehow these people think that oil speculation serves only to drive up prices, though they never explain how anyone makes money buy just buying oil and never selling.)
On the other hand, if the poster knows what he is talking about (and what are the odds of that), I am happy about one thing. If Phil Gramm is driving McCain's economic policy, we have some hope that McCain may not play maverick and hose the economy. At least Gramm understands economics.