Saturday, December 27, 2008

The New Deal, Government Spending and Rent Seeking

The New Deal was "clean" and free of corruption, at least according to Paul Krugman? Perhaps not so much (EconLib). Does it really surprise anyone, particularly given how widespread earmarking is (PorkBusters), that individuals and companies would now seek to profit from the US government's new interest in spending trillions of dollars?

Bizarrely, despite the fact "the Federal Register, a list of regulations, reached an all-time high of nearly 79,000 regulations, up from nearly 64,000 in 2001; [and] new regulations have mounted rather than diminished under the Bush administration," (David Polanyi, RealClearPolitics via Forbes) there are those who think that "laissez faire economics is to blame" (Huffington Post). Quoting Polanyi, Forbes' Karlgaard notes:

Huffington argues, in effect, that communism and "laissez-faire" (minimal-intervention) capitalism are equivalent ideological extremes. Sure, one of these philosophies spurred the murder and misery of hundreds of millions worldwide; the other promotes liberty, innovation and welcomes foreigners to lounge around in expansive mansions paid for by their former oil baron husbands. [Note: Huffington, for those of us who aren't avid political buffs, happens to be such a foreigner]
Given the choices in the last US Presidential election, it's clear that opponents of markets have won a battle (I'm under no illusions that McCain would have done any better but possibly even worse given the most recent events). Bloomberg profiles the Chicago School of Economics in the midst of this mess (via Freakonomics):
At the University of Chicago, once ascendant free-market acolytes are finding themselves in an unusual role: They’re battling a wave of government intervention more sweeping than any since the Great Depression as the U.S. struggles with the worst recession in seven decades.
So what's the motive, for blaming markets/capitalism, if opponents are so wrong? Most importantly power with which they seek to profit (the Bailout of the UAW being a case in point, via Instapundit and IBD). According to Kargaard:

As you partake of the media, look for “the worse, the better” bias in everything you see or read. Know that the Manhattan media (what's left of it) and the Washington political establishment are itching to expand their influence and control over American life. They are at war with the entrepreneurs, small-business owners, libertarians and church-going families who donate the highest proportions of their income to charities.

For the media and political classes, it's "the worse the better," even if one must fudge the worse.

No comments: