With huge segments of the world economy mired in depression, can we conclude that capitalism has failed or that the market behaves irrationally? That seems to be the consensus among many commentators, so we hear a wide range of calls for government intervention to patch things up.
What happened to the gold standard? As Greenspan put it, "following World War I such tight restraints on economies were seen as too inflexible to meet the economic policy goals of the twentieth century." What those policy goals were, Greenspan did not spell out. Let's fill in the blanks.
The phrase of the day is "moral hazard." It's something everyone seems to think is a bad thing, but few are willing to do anything about, certainly not Alan Greenspan. So far, he's on record backing the Mexican bailout, the Asian bailout, the bailout of Long-Term Capital Management, and more IMF funding, despite the financial dangers all these create down the line.
In the nineteenth century, the legal profession was open. There were no mandates on the kind or duration of education a person had to have. No law restricted anyone from offering his services. The only complaints were from lawyers who wanted to force "higher standards" upon the market.
Big media outlets are ignoring the quiet revolution that is taking place across America. Politicians don't talk too much about it for obvious reasons. This revolution is building incredible momentum. It now threatens the legitimacy of every level of government, the viability of government management of society, and the credibility of career politicians, assuming someone still has any faith in them.
No sooner is John Maynard Keynes declared irrelevant for modern economics than some establishment figure declares him the god of the age. It happened again, in the pages of Fortune Magazine (August 17, 1998). The writer was MIT's Paul Krugman, one of the most famous economists alive. His article, "Why Aren't We All Keynesians Yet?" was a hymn of love to the man who made government management of the economy a worldwide practice.
The coalition of government bureaucrats, politicians, trial lawyers, and "political activists" who have orchestrated the demonization of "Big Tobacco" are about to wage a similar smear campaign against what the pressure group Common Cause has labeled "Big Booze." The beer, wine, and liquor industries will be demonized; dramatically higher taxes will be called for; and unconstitutional bans and restrictions on commercial advertising will be vigorously lobbied for. This was the political modus operandi of the anti-smoking movement, and it will now be carried over to other industries.
As the world financial system entered a state of collapse, commentators said that Russia had traded the shortages of socialism for the bank runs and financial panics of capitalism. In fact, modern finance and banking are built on unstable, socialistic foundations.
The world has just finished what, for Americans, is the curious spectacle of the Soccer World Cup. Every four years since the 1930s teams representing 32 countries have met (in a different venue each time) to decide who is best. Much of Europe, South America, and Africa come to a halt during the three weeks of Cup play.
Agriculture Secretary Daniel Glickman has been deeply troubled by perceived problems with America's food supply. In a meeting with the Senate Agricultural Committee last fall, Glickman urged lawmakers to approve legislation which would give his department more enforcement authority over cases of contaminated meat and poultry. Among other provisions, he demanded that the department be able to impose fines of $100,000 per day on violators of meat-processing regulations. "I think we can come down a little more strongly on the side of the consumer," the secretary told senators.
