Sunday, October 26, 2008

Where does government end and the market begin?

The most careful writers are seeming to have trouble making a rigorous distinction between governmental economic actions and private economic actions. Where do the activities of the state -- regulation, taxation, oversight, arbitration, civil and criminal prosecution -- stop, and the independent, profit-seeking, "capitalist" private sector's domain begin? In terms of the present financial crisis, which came first, the corporate fat cat or the corrupt pol? Or are they even two distinct classes of person?

Pat Buchanan (The American Conservative, October 6, 2008) also finds a blur where this divide should be:

"'Government must save us!' cries the Left, as ever. Yet who got us into this mess if not the government -- the Fed with its easy money, Bush with his profligate spending, and Congress and the SEC by liberating Wall Street and failing to step in and stop the drunken orgy? [emphasis added] ...

"An unelected financial elite is now entrusted with the assignment of getting us out of a disaster into which an unelected financial elite plunged the nation. [emphasis added] We are just spectators."

Whose responsibility is it to rein in Wall Street? If it is the state's, as Pat implies in the first paragraph, then our system is not free-market capitalism; thus we should hand even more authority over to the state to regulate economic decision-making. If it is Wall Street's responsibility, as he implies in the second paragraph, then why blame Congress for not doing Wall Street's job? These "elites" are a confusing concept, and therefore not a concept at all.

Pat's final paragraph, however, is clear as a bell and impossible to deny:

"What the Greatest Generation handed down to us -- the richest, most powerful, most self-sufficient republic in history, with the highest standard of living any nation had ever achieved -- the baby boomers, oblivious and self-indulgent to the end, have frittered away."

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