Posted by
Andrews on Sunday, November 23, 2008 8:13:00 PM
Once again, I see nominal conservatives buying into the liberal lies about the current financial problems. I was reading the Townhall site when I saw a most horrifying title "
But Regulation IS a Good Thing". And as the title suggests, it is yet another call for "common sense" regulation of the financial markets.
And, as expected, it includes
the pro forma denunciations of "
greed", that somehow got us here. Of course, as usually, it never manages to explain how "
greed" drives people to make bad loans, or why "
greed" would make people
buy and hold these bad loans.The author just assumes that since it involves the stock market, it must involve "
greed" and thus "
greed" is to blame.
Two points I have made again and again, but apparently not enough to get through the thick skulls of nominal conservatives who talk like liberals.
First, "greed" is a good thing. It is what makes us get up in the morning and go to work. It built this nation. It drives our economy. The desire for more material wealth is what drives everything around us. If not for greedy people no one would be giving you electricity to power your computer, or the internet to bring you this article. Nor would you have your computer at all. Greed is beneficial. In fact, greed would have avoided this problem, as greedy bankers don't give loans to unqualified borrowers. So, blaming greed is absurd, it is like blaming famine for the obesity epidemic.
Second, the problems we face today are form the antithesis of greed, the government's altruism. the government wanted poor people to have houses, sot hey told lenders to ignore common sense and make nonperforming loans. They then bought up those loans, bundled them with good loans, and sold these deceptive packages to the market. That is how the bad loans got into the financial markets, by well-intentioned government altruism, not through greed.
And as for the author's final conclusion, that we need to "self-police", and when we don't, the state should step in, that is absurd. The state stepping in is what caused this problem. Even an unregulated market without "self-policing" would never give us the current fiasco. There is no need for "self-policing" just a state that keeps its hands and its social engineering schemes out of the market.
Now, I am sure the author would call me a "laissez faire fanatic" or something similar. However, I can challenge him on one point, and one very telling point. My beliefs are the outcome of a consistent view of the market, are his? Or his just the "practical" unprincipled view that sees the market as unknowable and the best solution "whatever works". Because if it is, we have tried that for decades now, and it certainly seems "practical" solutions are the least practical choice there is.
Perhaps it is time to return to principles, to a systematic view of the economy, and forget about
this most impractical "practicality".
POSTSCRIPT
I have written the
first installment of a series trying to dispel all the mystification surrounding monetary matters, to allow everyone to see how very simple this whole crisis is and how absurd it is to blame it on greed. (As well as how wrong headed this bailout, and its predecessor, the S&L bailout, were.) I will be writing the rest of the series this coming week, so stay tuned.