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Markets Gone Wild

October 10, 2008

The current mood is that capitalists have been out partying, too much and too often, in a climate of laissez-faire and deregulation which started under the Reagan administration. Now they’re drunk, they lost all their money and they’re coming home, tail between their legs, to a steadfast and “loving” parent, the government. The government, our savior, is willing to accept the stray lamb back into the safety of the family hearth. What’s bad about that? A well-meaning and wise mother-nanny will nurse the markets back to sanity and then slowly, when they’ll feel better, she’ll let them go out again, better and improved.

Ahem… That’s not how governments work. “Deregulating” is a dirty word. One could be fined for using it. Once a regulation is in place, only a much stronger and worse regulation can replace it. Because that’s the nature of politics. Forget Wall Street. It’s K Street where the action’s at. The wildest market of all. Completely unregulated. Where lobbyists compete for the new regulations that ever inventive and “innovative” politicians keep pulling out of their hats.
There’s a bubble now, for sure. It’s driven by a climate of euphoria and irrational expectations. It’s taking place right under our noses, on prime time C-SPAN. Congress is starting the biggest wholesale in government regulations in the history of economics. The stuff is so hot, it’s flying off the shelves!

So here is a better analogy: “a concerned and loving mother (the gov’t) takes her son (the market) back…locks him down in the cellar and throws away the keys”. That sounds more like it.


From → Government, Politics?

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