Nick Gillespie on the Bailout Bonanza

Lynne Kiesling

I am unlikely to say anything more here about our current financial situation, its causes, and the policy responses to it. I’ll give the likely-final word to Nick Gillespie at Reason:

“For 30 years,” begins a New York Times story titled “Both Sides of the Aisle See More Regulation,” “the nation’s political system has been tilted in favor of business deregulation and against new rules. But that is about to change, now that the government has been forced to intervene in the once high-flying financial industry to avert an economywide crash.”

Never mind that the financial industry is one of the very most regulated sectors of the economy here and abroad. Never mind that the two mega-corporations at the very center of the recent market meltdown, Fannie Mae and Freddie Mac, were massively regulated government-sponsored enterprises that were doing the bidding of the politicians to whom they gave cash so lavishly. Indeed, never mind that the Times story above features a chart showing that George W. Bush increased regulatory spending far more than any president since Richard Nixon (by some measures, Bush even routs Nixon). Forget about deregulatory successes in airlines, interstate trucking, and telecom. The culprit is now and will always be deregulation. And the answer will always be more regulation. …

None of these memes bodes well for “Free Minds and Free Markets” over the short term.