Freedom Under Fire

You know those multinational coorporations that have been blamed for ruining our economy over the last few years by removing jobs from our work force and for using cheap labor across the globe?  Thank goodness they have been because otherwise the current recession would be much worse, similar to the Great Depression.  The linked article describes how current relations between countries is already making sure the problem isn't as bad as it was eighty years ago and how they could be better to prevent future dips.

There are two dialectical sides in the discussion for free trade: one is that the current downturn is proving that American-style capitalism is failing and dead, the other is that the system is fine but government is screwing everything up.

Even before most Americans knew that there was a problem with the system as a whole, many across the world were feeling the pain of globalized free markets.  Rising oil prices were raising food costs, not terribly noticeable to most Americans, but in Africa and South America the already struggling peoples were even more detrimented.  Then the market tanked due to the housing bubble bust and the shit hit the proverbial fan.  Economists started saying that there was a huge problem with the system and government needed to intervene.  The problem isn't greedy CEOs or overreaching globalization or lax regulators, the problem is the free market system.  Even Alan Greenspan, the champion of the American economy and free markets, was shocked at how badly the market fell.  He was sorry for all the pain that his principles hadcaused people and started asking governments to step in and rescue the innocent bystanders.  I won't go into the irony of who governments are actually helping today, but it is coming soon, promise.

In a week we inaugurate a new president.  He has said that he wants to roll out $800 billion in new bailout funds to jump start the economy back into shape.  Unfortunately for him, he doesn't just have to save our economy right now; he has to save our way of life.  Government spending is all well and good in small doses when it is aimed at a direct problem with strict oversight. Example: nobody has complained at the government giving everybody a $40 coupon to get the cable converter box.  This is effectively a bailout for the cable companies.  They can't afford to send out analog signals and Congress decided to help those people who receive analog cable and can't afford to buy the convertor themselves so that they can still recieve basic information like the news and Jerry Springer.  How much is that costing the government and saving the cable companies?  Nobody has asked because it makes sense to do that.  It is a relatively small dose of money given directly to people who need it.  That's what we pay taxes for right?

The system works when it is used properly.  I hate to say this, but the problem is user error.  Fannie Mae and Freddie Mac were government organizations that told banks that they had to give out mortgage loans to people who could not afford houses.  Does that sound like free markets?  No.  That is government intervention.  If the banks had been left to their own devices, they wouldn't have given so many people home loans.  "But Leviathan, if they don't get loans then they can't afford homes, where will they live?"  In an apartment, a smaller house, with family, or in a box.  Housing is not a basic right of humanity.  It is a basic need.  It is why people get up in the morning and go to work.  It is why women used to marry men and have kids.

There are many lessons to learn from this crisis.  The most important lesson to take away from all of the evidence is that the government needs to remember what the United States government is supposed to do.  I am, unfortunately, not smart enough to tell anyone what the United States government should do, so I refer to the preamble of the Constitution for the answer: to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general welfare, and secure the blessings of Liberty to ourselves and our posterity.

Free market capitalism has ups and downs.  Bankruptcy lawyers and repo men are feeling the ups right now while everyone else is feeling the downs.  Just because you are losing money doesn't mean that the system is broken, in fact it means that the system works.  I think we have seen enough evidence to stop trusting what the Bush cabinet says and has anyone ever trusted their broker?  Stop complaining, keep working (even if it means at a job you don't like), and start putting money into savings.  We've gotten through worse and we will get through this.  We have to do it together and without government regulation.  Otherwise we will have a FEMA for the economy: badly put together, shows up too late, and led by someone who doesn't know the difference between a flood and a horse's ass.