I (obviously) haven’t read everything written on the Fed’s Bear Stearns intervention. No need. Today’s column from E.J. Dionne is the most intellectually dishonest piece possible, relying on a skewed, limited set of the facts. There’s too much to excerpt and comment on to fully highlight its idiocy, but this is close to a summation:
But in the enthusiasm for deregulation that took root in the late 1970s, flowered in the Reagan era and reached its apogee in the second Bush years, we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument — when it works. But the free market is just that: an instrument, not a principle.
Dionne mistakenly assumes that the American economy is a free market. It is among the freest on Earth, but it is not free. The free market is a principle. The American economy is an instrument.
It is an instrument for Wall Street tycoons who like corporate welfare. It is also an instrument for people like Dionne:
So now the bailouts [ed. note: this isn’t a “bailout”] begin, and Wall Street usefully might feel a bit of gratitude, perhaps by being willing to have the wealthy foot some of the bill or to acknowledge that while its denizens were getting rich, a lot of Americans were losing jobs and health insurance. I’m waiting.
If the “wealthy” who will be “asked” to foot some of the bill had no financial interest in (i.e. shares) or transactions with Bear Stearns, why is it her responsibility to pay more for the Fed’s actions? As a response to corporate welfare not benefiting her? And what if she already acknowledges that a lot of Americans were losing jobs and health insurance? Not that acknowledging that matters to anything; why does it matter?
Believing welfare is a dangerous policy for government is a principled stance. Believing that corporate welfare is a dangerous policy for government is a stance that serves as an ideological instrument for further regulating the American economy away from the free market.