Learning The Wrong Lesson From Wall Street

Learning The Wrong Lesson From Wall Street March 18, 2008

Posted by taoist in Capitalism and Economics.
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E. J. Dionne at Real Clear Politics is using the current financial turmoil to bash private markets and capitalism. This is entirely the wrong conclusion to draw the situation. What E.J. is missing is that every time the government steps in to help people or companies with a bailout of some sort or another, or tries to manage the market in some sort of way, it is inevitably prolonging the problem. Any kind of market has its occasional hiccups, but the difference between free market solutions and government solutions is that free market solutions, while briefly painful, correct the problem, while government solutions not only prolong and compound the problem but create a welfare state, both personal and corporate, that is itself a problem.

In short, not only is E.J. Dionne completely wrong about the solution to the current market troubles, but E.J. is completely misunderstanding that the current market troubles are being prolonged because government intervention of exactly the type that E.J. thinks is the superior way of doing things is being provided.