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Howelling-at-the-Moon
!Libertarian Rants! John Wingspread Howell Is Free Market Capitalism Out of Vogue?
Mainstream Pundits Idealize Regulation
Is De-regulation the Culprit?
Chicago, November 14, 2008
The job of the "Fourth Estate" (the press) of our republic is to hold government accountable by monitoring, reporting, and analyzing what is being done and said by government. In a manner similar to their complete sell-out over the "necessity" of the Iraq War, the mainstream media is at it again. This time the topic is free markets and regulation.
To hear the pundits (and many grunt reporters who have no business expressing an opinion) one would think that there is absolute consensus that it is a lack of regulation that has led to the current economic crisis, perhaps the greatest economic crisis since the Great Depression, perhaps even greater, potentially-- we won't know the answer to that for many years most likely.
The fact of the matter, in my humble opinion is not that a lack of regulation has gotten us where we are today, it is selective de-regulation. The differences should be obvious. It is not true that government has not regulated markets. They have practiced selective de-regulation, strategic regulatory roll-back, targeted regulatory exemption. In other words, as usual, big government has created loopholes and inequities that have allowed the greedy to exploit opportunities to rob the bank.
This isn't the kind of unregulated free market system Libertarians envision. Libertarians are not opposed to regulation, we're opposed to government regulation. We have observed that whatever government touches, they screw up, either by inefficiency, incompetence, corruption or all of the above. The current management of the meltdown is an example. Piecemeal bailouts. Save Morgan Stanley, Fannie Mae, Freddie Mac, Bear Stearns. Let Lehman go broke. Give the bankers and brokers a blank check, but keep mortgage holders on the hook. Buy toxic debt. No, don't buy debt, buy the banks. And so on, and scooby doo!
The LIbertarian way is to leave regulation (of everything) to those directly involved. We envision a bicameral system of consumers' organizations monitoring agencies, companies and institutions, while each industry and profession also monitors itself from within. Transparency would be expected by all from all about all. That would be the law. With full transparency regulation is not required since it is obvious to everyone what is really going on. Where transparency is not maintained or a false transparency is created, that is fraud, and fraud is one of the two f-words that libertarians would make illegal in our perfect world.
The whole idea of regulation is based on secrecy. Where systems and institutions operate in secrecy, it could be argued, government is needed to peek under the curtain and make sure nobody is stealing or squandering your money. Statists, whether Republican or Democrat or something worse believe and assume that such secrecy is a given if not a requirement, and that only government can be trusted to make sure that what happens under cover is above board.
The whole idea of libertariansim is that no cover is needed. We remove the curtain and eliminate the need for anyone to play peek-a-boo. Free markets demand consumer protection by their very nature. Consumers who perceive they are at risk will act on their own to deal where transparency is present and protected. Who protects it? Again, consumers themselves as well as those who wish to profit from the trust of consumers. In a free market those who wish to gain clients will do what is necessary to establish and maintain trust. Transparency created and maintained by self-regulation and by consumer self-protection systems does a natural and efficient job of preventing and punishing fraud. On the other hand, even if we assume the government is acting purely on the public's behalf, without complete transparency, the best efforts of external regulation, are easily fooled or evaded.
-Howooooo!
John Wingspread Howell-
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