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Saturday, October 25, 2008
It Hasn't Been Tried

It wasn't free-market capitalism that failed, but it's certainly the popular scapegoat.

Decades of discussing politics and political philosophy with all sorts of people have trained me to recoil from the argument I'm about to make, because some people use essentially the same argument about a much different thing.

You see, there are still a lot of folks in the US -- to say nothing of the rest of the world -- who think either Communism or Socialism is a desirable ideal and worthy of continued pursuit. They don't feel that the obvious, large-scale, sometimes bloody failures of their pet ideology discredit the ideology itself. Communism failed in the Soviet Union, they will tell you, because it wasn't true Communism. Socialism has impoverished Western Europe and frayed society there not because of Socialism's inherent flaws, they think, but because Europe got it wrong. (I know that some others think Europe got it right.) "Real Communism" -- or real Socialism; pick your poison -- "hasn't been tried," they'll say.

They want another chance, because in their hands it will go right, where in others' hands it has gone wrong. They are either smarter or morally superior, or simply patient enough to wait for the right time and conditions. The others failed because they rushed in prematurely or greedily or foolishly, somehow, or because their characters were too weak or too flawed.

So I'm reluctant to say what must be said about the United States of America these days, even it if is true: Free-market capitalism didn't fail. It hasn't been tried -- at least not lately.

Lovers of oppressive government from the salons of Europe to the streets of tyrannical Islamic states to the Senate Democratic Caucus are gleefully proclaiming the end and final discrediting of free-market capitalism, as they watch the developing international monetary and banking crisis -- but especially the crisis in the United States.

What really happened here is that big-government types, pursuing both their political agenda (a key phrase is "fair housing") and, in some cases, their own fabulous wealth, distorted the market until it failed. Now they're blaming the failure on the market itself. This is like taking the battery out of the smoke alarm, then suing the manufacturer because the disabled unit failed to warn of a fire.

Nothing is quite this simple, but the basic story line here is that the federal government coerced banks to make bad mortgage loans on a massive scale. Then they hid the developing threat and ignored warnings for years, until a large part of the system simply toppled. Now they are rushing in and prescribing a cure for the problem which mostly consists of having more of the problem itself.

This destruction is a bipartisan effort to some extent, but more Democratic than Republican. Among others, Barack Obama and his allies at ACORN are in it up to their eyeballs. And the polls say -- though they still could be wrong -- that we are about to put the fox in charge of the henhouse.

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