In the wake of our current financial crisis, the American public’s desire to finger the guilty party resembles a poorly played match of Milton Bradley’s “Clue.“
In this board game analogy, the role of Mr. Boddy is played by our dying economy, and for many, the most logical culprit for the murder seems to be “Mr. Capitalism with an unregulated market on the steps of Wall Street.” While this judgment couldn’t be further from the truth, it seems as if each passing day adds another name to the list of those willing to drop responsibility into the lap of laissez-faire economics.
Prior to his election, Barack Obama stated that it was the government’s refusal to place necessary regulations on the economy that led to the current crisis. In a move that seemed to follow Obama’s lead, French President Nicolas Sarkozy stated that “Laissez-faire is finished. The all-powerful market that always knows best is finished.”
This frightening yet ill-planned blame game has even infiltrated the pages of The California Aggie, evident in my fellow Tuesday columnist’s statement, “Just as unregulated capitalism nearly destroyed us once before, it threatens to do it again. Wall Street is a casino for the insanely rich who gamble terrifying quantities of money on a daily basis. Unrestricted capitalism breeds unrestricted greed.“
If our world operated strictly on the rules of Clue, the players mentioned above, along with the millions of other Americans eager to point the finger, would find that their beloved scapegoat – laissez-faire capitalism – was not only innocent, but wasn’t even present at the time of the murder.
The fact is that unregulated capitalism hasn’t existed in our country in quite some time. In the words of financial expert Yaron Brook, “Laissez-faire means laissez-faire: no welfare state entitlements, no Federal Reserve monetary manipulation, no regulatory bullying, no controls, no government interference in the economy.“
America’s gradual transition to a welfare state that began with the New Deal policies of FDR effectively destroyed the notion of true capitalism, so the idea that laissez-faire economics has caused this financial crisis, or even exists, is not only untrue but downright laughable.
Now, desperate for a solution, our country is beginning to increase the amount of government regulation present in the economy, threatening to up the dosage of the same poison that got us into this mess in the first place.
For those of you who refuse to acknowledge the symbolism of that statement, or are simply not intelligent enough to understand the idea of rhetorical devices, I will state it plainly: The financial crisis was not caused by an unregulated economy, but rather is the result of government intervention.
The current economic mess faced by our country entered the public eye via the mortgage crisis and the emergence of the so-called “housing bubble.” While some ignorantly claim that greed-driven capitalism was to blame, the real cause was the Federal Reserve keeping interest rates below the level of inflation, thus creating the illusion of artificially low mortgage rates. Unsuspecting buyers entered the market, purchased homes, and … well, you know the rest.
Now, as the American media covers the $700 billion bailout, a possible rescue of the auto industry, and the hundreds of other ways our country plans to destroy its economy it seems as if the inevitable is approaching.
I simply ask that when the whole system goes down the tubes, the American public point the finger at the guilty party, and resist the urge to further drag the name of capitalism through the mud.
JAMES NOONAN’s ego has survived yet another week of hate mail. Somewhere along the line this guy’s going to break, right? Hit him with your best shot at jjnoonan@ucdavis.edu.
