Wednesday, September 17, 2008

Free Market Freak Out

As I mentioned in my last post, I'm completely addicted to RedState. It's just too funny. This time, I specifically went there to see how these free-market freaks would react to the AIG bailout, and wow, I wasn't disappointed. RedState Founder Erick Erickson's post on the matter was simply titled Disgusting. Disgusting. Disgusting, and suggested that Ben Bernanke be flogged in the streets and exiled to a communist country. He even went as far as to thank Dear Leader for this...sarcastically. Yeah, it's that bad.

But the best part was reading the comments section of that post. Because for as much as this was a dreadful option, it was the only sensible one available. Yet...these people are freakishly anti-government, particularly when it comes to their imagined free-markets. They've been firmly brainwashed into believing that the only real problem the markets can have is the government, and so the idea that the government can fix anything is simply a mind blowing event. It's like if PETA had to admit that eating more beef would prevent animal cruelty.

And yet for all their hand wringing and teeth gnashing, there really wasn't much of a sense of who was to blame for all this. Were someone who was completely ignorant of finances to read the messages on that board (which I'm sure was often the case), the best they could assume was that the problem was entirely caused by the government and stupid investors who deserve to suffer. Oddly, the word "greed" never appeared once in anyone's comment.

The Comments

We've got commenter Red Oakster blaming the accountants, saying "If the Feds reformed mark to market accounting rules they would have been able to solve much of this problem at much lower cost. Just because an asset is illiquid should not require the owner to value it at the level of a lowball or even non-existent bid." Yeah, because a truly free market should be allowed to pretend that junk investments are still worth as much as they stupidly paid for them. And hey, how could markets function if investors actually knew what they were buying?

BigGator5 says "This is all the more reason to elect people who will never do this again"...without actually explaining what these elected people should have done or how we can tell which people are the right ones to elect. John McCain has now reversed himself overnight and admits that it needed to be done. And not only did he support the laws that allowed this to happen, he admits that he didn't even know it was happening. Of course, rereading BigGator's sentence, I see that the use of the word "again" could indicate that he thinks it's ok to elect people who did this, just as long as they never do it again.

When TomOConnor makes the mistake of asking if AIG's customers and counter-parties should be allowed to suffer, he is met with the all-purpose conservative mantra "Caveat Emptor" (which I believe is Latin for "Fuck Off, Loser") and told that his suggestion is "utter crap" and "bull." A third commenter suggests that customers would be safe because the insurance business is highly regulated, which corresponds with the Law of Conservative Blindness, which dictates that conservatives will neither praise or demonize any regulation which prevents a free-market disaster from being worse; they will simply assume it was part of Adam Smith's Invisible Hand and imagine the markets would have fixed it anyway.

And throughout the board there are comments insisting that this must be a bad deal, because no other company wanted to loan AIG the money. Because there are TONS of insurance conglomerates with $85 billion sitting around in case one of their competitors needed a little cash. And no, it didn't seem to occur to them that they're relying on the same Wall Street Wizards who got us into this as the guideline for determining good business decisions. Fool me twice, shame on, shame on...government is the problem.

More Borg Brain

At this point, I'll just finish up by creating a paragraph based on a few random sentences, posted in the order I found them in.

Until they quit interfering with financial markets, the true economic recovery cannot begin. Sad indeed. The invisible hand was not meant to be Bush's hand. This is only going to perpetuate the problem, not solve it. I've always believed that the free market can correct any problem -- but there's very little free-market at work here. It's not being given a chance. This is bad for the GOP. The timing really couldn't be worse. It's a known fact that wall street is infested with dems....I'm not saying that is being orchestrated....I'm just saying....

And I think that just about sums it up. The problem clearly has something to do with Bush's government interference and the Dem's Wall Street infestation, which made it necessary for them to chose a solution that made the problem worse. If only the free-markets were finally given a chance to succeed...

P.S. For anyone curious, yes, this post got bloggered and several different versions were posted online. And no, I'm not at all happy having to recreate it.

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