I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
Lack of regulation brought us here. Lack of regulation brought us here. Lack of regulation… enough.
Forgive me, but I was trying to compensate for all the authorities and experts who won’t focus on how we arrived at the brink of depression.
President Bush never mentioned deregulation in his Wednesday night address. On MSNBC, Christopher Dodd, the Senate Democrats’ point man on the bailout, noted that the “cops weren’t on the beat,” but quickly swerved toward the “future.” And in his Albuquerque Journal analysis Sept. 23, Establishment economist Robert J. Samuelson omitted the deregulation that permitted Wall Street to become a full-fledged gambling den.
Diverting attention from why the system failed is the best way to escape reform.
That failure shouldn’t surprise anybody. Deregulation stems from a bipartisan consensus, traceable to the Reagan era, to untether business and finance. Economists and mainstream news sources enabled it by describing the economy – production, buying and selling – in language that’s obtuse, unexamined or patently absurd.
This retailing of ignorance begins with the mantra that ours is a competitive free market economy with minimal government interference. That describes our economy as accurately as “war on terrorism” describes U.S. Mideast policy, but journalists use “free market” as automatically as they do the latter, a White House marketing slogan.
In a free market economy, business would be governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy.
That’s not how it works, not remotely. “Government interference, regulation or subsidy” affects most medium and big businesses; only Mom-and-Pops are exceptions.
Regulation, the bête noire of chambers of commerce and editorial writers, empowers government bureaucrats to interfere with the entrepreneur’s freedom to make an honest buck.
Perfectly true, except when it isn’t. Like when regulation protects business from competition, the way over-the-air TV used the FCC to resist upstart cable TV entrepreneurs. (Shhhh! Don’t repeat this, but competition is not a major corporation’s deepest desire.) Or, when regulation provides succor and discipline; that, presumably, is why Goldman Sachs and Morgan Stanley, big independent investment banks, just persuaded the Federal Reserve to regulate them. As bank holding companies, they will now take fewer risks and sit on cushions of bank deposits.
As for subsidies, well, that’s socialism, right? Except when our elected representatives direct our tax money to private enterprise – hey, gotta create jobs. New Mexico Sens. Pete Domenici, a Republican, and Jeff Bingaman, a Democrat, routinely vote for business subsidies, differing only on which to underwrite.
Which brings us to the Big Bailout – or, as some put it, socialism for the rich. It will be theft, really.
The Administration proposes that you and me (or our kids) pay to save financial institutions that borrowed big, placed their bets and lost. Corporatists in both parties and the Establishment press will moan about how it’s unpalatable but must be done. For, as Samuelson tells us, “The ultimate horror is a financial panic. Paulson hopes to avoid that.”
Good goal, but where’s the justice? We pay for their sins? In fact, Establishment economics – to which Samuelson, the Administration and corporate Democrats subscribe -– assigns justice a low priority. No wonder Washington won’t consider bailing out folks at the bottom, paying their mortgages and thereby resuscitating the real estate market while cutting financial industry debt.
No, conservative David Brooks was correct when he wrote in the New York Times, Sept. 24 that “We’re not entering an era when government pounds the powerful on behalf of the people.” (He seemed pleased to hear it.) “We’re entering,” he continued “an era of the educated establishment, in which government acts to create a stable and often oligarchic framework for capitalist endeavor.”
Pretentious? Very. Ignorant? Unbelievably. The New Deal was such a framework. It first saved capitalism from capitalists in the 1930s. After World War II, it produced national prosperity while creating the American middle class. But the “educated Establishment” or “capitalist endeavor” has repealed it, redistributing wealth upwards, the tax burden downwards, clobbering unions and slipping regulatory fetters to bring us to… well, today.
And at any moment the folks who created the disaster will rescue themselves with our money – a legal, bipartisan theft.
