Radley Balko has written a devastating critique of the proposed government takeover of a huge chunk of the economy.
Balko first points out that the federal government employs accounting fraud to disguise its massive debts: “If any private corporation employed the same accounting tricks Congress and the White House use to hide the government’s massive debt and financial liabilities, its board and executive officers would all be in prison.”
Then, after talking about the new plans to bilk the taxpayer, Balko points out that the real culprit of the economic mess is the federal government, not the “free market,” as many allege:
Many commenters have blamed all of this on capitalism. This isn’t capitalism. It’s a peculiar kind of corporatist socialism, where good risks and the resulting profits remain private, but bad risks and the resulting losses are passed on to taxpayers. There’s nothing free-market about it.
Balko doesn’t get into all the ways that the government caused the current economic problems. Thankfully, Yaron Brook did that a couple of months ago.
But today’s statist politicians will hear none of the truth. For example, Barney Frank rationalizes the bailout and blames the problems on “a lack of regulation,” by which he means national controls.
The truth is the opposite of what Frank alleges. The government’s proper regulatory role is to protect rights of property and contract. When that happens, the free market is regulated by the private actions of millions of participants. Successful businesses thrive; foolish ones ultimately fail. This healthy regulation of the markets has been severely undermined by national political controls. Yet, now that those controls have failed, Frank pretends that the problems were caused by non-existent liberty, in order to rationalize more national political controls.
Come to think of it, that’s a pretty good summary of how the Great Depression got rolling.