A recovering libertarian's further mullings
HONG KONG -- I continue to soak up the economic news here, in this finance-obsessed city, and ponder whether traditional capitalism is being forged into something new in the crucible of global economics.
Just a few years ago, smart people claimed that states are becoming less relevant than markets. But now that the markets are collapsing, all the businesses in Asia and America and Europe are begging states to bail them out. After all, GM can't force you to buy its car; but GM can beg Uncle Sam to tax you in order to bail out GM. It's happening around the world, as China and other nations are readying massive bailouts and job-creation programs.
The premise of libertarians and small-government conservatives is that the market should run free, unfettered by government policies, taxes or regulations. The rub is that, when industries in Country B are getting a boost from Country B's tax coffers, you're no longer in a "free market." You can have a market that's regulated to a larger or smaller degree, but you no longer can claim to keep government "out."
Chinese officials are apparently worried that their investment in America's massive debt could be threatened if other nations start pulling out of investing in America's debt. I'm not sure exactly how that would work, but I could imagine some market forces or political forces pushing money from Dubai, Russia and elsewhere away from America, causing the U.S. to suffer and leaving China holding the bag.
It's a lot of things, but it's not a "free market" anymore. Governments run economies. Our government has run a debt-ridden economy -- and thus is now even more beholden to various to outside forces than would otherwise have been the case.
These days, we frequently think of government intervention in presumably capitalist economies (yeah, that's sort of an oxymoron) as a relatively new phenomenon. Unfortunately, it's not new at all. Ayn Rand began writing Atlas Shrugged in 1941 (it was published in 1957). Rand was responding to government encroachment in the economy and elsewhere almost seventy years ago - encroachment that reminded her of European despotism.
Americans weathered the New Deal and the Great Society (busts by every quantitative measurement); today, we're merely on the cusp of yet another spike in the size and scope of government, thanks to the policies of the Bush and Obama regimes. Nothing new.
I'm encouraged that Americans, more and more, appear to be turning against bailouts and Obama's so-called stimulus package. Democrats like Barney Frank are complaining - legitimately - that they don't have a handle on how and where the bailout money is being spent. Unfortunately, those same Democrats turn around and allocate more bailout money. Then we hear about executives receiving outrageous bonuses subsidized by taxpayer-funded bailout money. Wells Fargo is soon taking a junket to Las Vegas on the backs of American taxpayers.
Obama's approval ratings are dropping big time, and he just started his first full month as president. Amazing that the door is already wide open for Republicans who truly want to be fiscal conservatives.
John, please, "Obama's approval ratings are dropping big time, and he just started his first full month as president." That's a bit premature.
First, exactly how much have they fallen?
Second, considering that the guy inherited the greatest economic disaster in two generations, how relevant do you feel his poll numbers after one month?
So my quick check shows that Obama seems to be at 62% in the polls, and I recall that he's only been in office for two-plus weeks, not the month that John states. I do think it's overstating the matter hugely to claim that the public suddenly rejects government intervention.