The politics of the financial crisis are going to be messy, but one thing is for sure, Democrats will push for more market regulation under the cloak of helping the free market. This is what I like to call it the FREE, or Federally Regulated Economic Exchange, market philosophy.
The FREE market is a union of free market rhetoric, leftist moralism, and collectivist economics all exercised through a political body. The FREE market relies on the idea that economic freedom equates to personal freedom; however, it adds the thought economic freedom is not possible without the intervention of government. In the FREE market, multi-national corporations are assumed to be bad players in the global marketplace. Thus, the tax and regulatory code must be altered to limit the ability of the free market evolve on its own, independent of the wishes of the political body.
Additionally, in the FREE market, the individual is never to be blamed for poor choices if they make less than $84,000/year. However, if an individual makes more than $200,000 they are assumed to be predators who made their money through the work of others and not because of any effort that individual put forth.
Take the mortgage crisis for example; in the free market, the high rate of foreclosures is due to a convergence of factors including individuals seeking loans for more than their ability to pay and the incorrect belief that home prices will always be on the rise. Under the FREE market, the individual is absolved from all responsibility and the problem arises from a supposed lack of regulations on banks and mortgage lenders.
Hillary Clinton sums up the FREE market school of economic thought pretty well;
I just believe that there’s got to be a healthy tension among all of our institutions in society, and that the market is the driving force behind our prosperity, our freedom in so many respects to make our lives our own but that it cannot be permitted just to run roughshod over people’s lives as well.
Posted in Economy, leftist thought | | Write a Letter to the Editor
How does Bernanke’s willingness to flush the dollar to protect investment banks fit into this analysis?
As much as I agree with some of your comments about the left’s wonderful economic policies, I think a balanced approach recognizes that what we are seeing now are, in large part, efforts designed to help the very rich.
Us yahoos out in the hinterlands don’t know how many of Lehman Bros. upper management are friends of Bernanke, et. al. Who does he have lunch with? Who does he play golf with?
Whether or not I agree, I can at least recognize a valid argument that we should bail out 500,000 idiot homeowners before we bail out 10 hundred-millionaires.
The whole thing is an argument to keep the government the hell out of this mess…on either side.
While I agree with the move to prevent a market meltdown in the Bear Stearns deal, Bernanke’s monetary policy has been disastrous. The Fed lowered interest rates over the past 2-3 years in order to continue to allow banks and individuals to borrow more money than they otherwise would have been able to afford. This artificial devaluing of the dollar is one of the primary reasons the mortgage bubble burst.
Yet as bad as the Fed has been in the past couple years, when I look at and read over the policies being espoused by the left they are not calling for less intervention, they are calling for more. To use a little compare and contrast, Bernanke put the Fed on the hook for $30 billion, Chairman Dodd and Frank want the Federal Housing Authority to take over $300 billion in risky subprime mortgages. Senate Democrats are proposing to restructure bankruptcy laws to write off debt equal to the difference between what a house was bought for and what it could currently sell for. They are also calling for an increase on the FHA loan limit cap to $730,000. The old cap was $362,000 and the economic stimulus raised it to $625,500. When I look at stuff like this I cannot take the criticisms from Democrats over the Bear Stearns deal seriously. The policies these FREE marketers are advocating constitute a wholesale takeover of the real estate market by the government, all in the name of helping the free market of course.
