Peter, I always enjoy hearing Burke's admonition that a member of parliament owes his constituents his judgment rather than a spasmodic jerk to the latest opinion poll. But isn't it the case that we're in this mess because US politicians previously subordinated "the general reason of the whole" to "local interests" and "local prejudices"? That's to say, with their usual casual destructiveness dressed up in the baby talk of "diversity", they chose to turn the mortgage industry into just another branch of the affirmative-action racket. The United States government in effect decreed credit a human right rather than a privilege judiciously granted by one independent contractor to another.
Do those legislators understand the damage they did to "the general interest"? One of my problems with the "bailout" is the way it's presented not as an emergency measure to correct the stupidity of previous political interference but as evidence of the flawed nature of the market, and thus a justification for more must-pass "emergency" measures ahead. Exhibit A - President Sarkozy rejoicing in the end of "Anglo-American capitalism":
The idea of an all-powerful market without any rules and any political intervention is mad. Self-regulation is finished. Laissez faire is finished. The all-powerful market that is always right is finished.
As a general proposition, when told by unanimous elites that a particular course of action is urgent and necessary to avoid disaster, there's a lot to be said for going fishing. If the entire global economy is so vulnerable that only the stalwart action of Barney Frank stands between it and ten years of soup kitchens, can it, in fact, be saved? Or look at it the other way round: Given any reasonable estimate of the number of headless chickens running around, was the five per cent fall in Asian markets and seven per cent "plummet" on the Dow in reaction to the House vote really the catastrophe some of my pals round here seem to think it was? If fear of seven per cent falls is enough to justify massive unprecedented government intrusion into the private sector, we might as well cut to the chase and go for the big Soviet command economy.
Tuesday, September 30, 2008