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Source link: http://archive.mises.org/8699/is-there-no-other-way-to-begin-a-week-in-review-article/

Is there no other way to begin a “Week in Review” article?

October 5, 2008 by

I know I’ve read some version of these first two paragraphs several times, even in the last year, and even critiqued one or two previous pieces. It seems nearly inevitable that the New York Times “Week in Review” will begin a story on the week’s economic news with some version of the “end of laissez-faire” thesis, which is always the same: until now we’ve had this huge and doctrinaire faith in free markets but now events are forcing us to realize that government has a role to play and so we must now adjust to the fact that the market is not all it is cracked up to be.

The problem is always the same: a complete denial of reality, and not just today’s reality but the reality for, say, the last 100 years in which we have not had free markets but some sort of interventionist state. But no matter how big the government is, how much it intrudes and distorts the markets, no matter how much it has subsidized failure, and been an essential cause of economic trouble, the New York Times is always ready to announce the “end of laissez-faire.”

So I present to you this week’s rewrite:

Is this the end of hypercapitalism?

For nearly a generation, the United States has driven growth by deregulating markets, lowering tax rates and promoting trade. Across wide swaths of the economy — from airlines to banks to energy to telecommunications — Washington stood aside, believing less regulation would produce broad prosperity, even at the cost of greater income inequality.

Now, with Washington setting aside $700 billion to bail out financial companies, the economy weakening daily and the Democrats likely to enlarge their majorities in Congress, it may seem that the United States is shifting away from faith in markets and distrust of government.

What purpose does this thesis serve? It seems obvious to me: it means never having to blame government for anything but doing too little.

{ 7 comments }

hz October 5, 2008 at 3:11 pm

only the terminally clueless think that the financial sector in any way represents a free market. “Deregulation” critics point to removing leverage restrictions on investment banks (which was a decision of regulators) as proof that somehow deregulation does not work. They are apparently not aware that such leverage is only possible on a large scale because institutions like the FDIC and Federal Reserve protect banks from market discipline.

Clearly we have a regulated financial sector, and you can’t blame the free market for failures that happen in a regulated system. Or I guess you can, but you look really foolish doing it.

Alex Peak October 5, 2008 at 3:21 pm

New York Times between the lines:

“For nearly a generation, the United States been in a state of utter anarchy, capitalism, and peace. And, as we have clearly seen, none of these things work. Across wide swaths of the economy — from airlines to free banking to energy to telecommunications — Washington stood aside, believing statism, interventionism, and war were somehow bad. (If one claims the FCC or Fed exists, just laugh at them.)

“With Washington setting aside $700 billion to bail out our financial friends, the economy weakening daily and the two parties likely to maintain their entrenchment in Congress, it may seem that the United States is shifting away from faith in markets and anarchism. After all, if anarchy, capitalism, and peace worked, we wouldn’t desperately need a fascist state to save us, and our poor little billionair elites, from responsibility.

“Save us, Mussolini! We need you!”

A couple paragraphs later they try to claim that the reason Dems did so good in ’06 is that the public prefered the Dems’ view on Social Security and Medicare.

Sure… I mean, it couldn’t possibly have been a revolt against the borrow-and-spend, pro-war position of the Republicans. Oh, no no no, that’s too logical. We couldn’t let the public remember that it was a series of issues on which the Democrats have refused to do a shred of good since taking victory. They haven’t done diddly squat to end the war or cut spending–big spending that the Republicans were simply rubber stamping; so, we won’t mention that that was the real reason the Republicans lost.

Here’s to hoping that we actually try the free market at some point in my life.

Inquisitor October 5, 2008 at 6:08 pm

Wait, whose distrust of gov’t is declining? Are these people serious or are they really Ivory tower nutcases?

Dennis October 5, 2008 at 7:39 pm

“The problem is always the same: a complete denial of reality.”

I would add that their goal is not and rarely ever was to acknowledge and explain reality. They deliberately ignore or obfuscate the facts. These types care nothing about the truth and reality, or simple honesty; their goal is to opinion mold with propaganda. They are liars plain and simple.

Ralph Fucetola JD October 5, 2008 at 9:15 pm

And the result of the intervention lauded by this intentional denial of reality will be hyperinflation… and effective repudiation of the fiat money system in which they trust.

Sooner, rather than later.

C. Evans October 5, 2008 at 9:29 pm

I agree with Dennis. The goal of such people is the complete control of everyone else. They are uninterested in truth and reality for such facts may loosen their grasp on power.

Barrone October 6, 2008 at 9:15 am

“It seems obvious to me: it means never having to blame government for anything but doing too little.”
(– J. Tucker)

{}

…it’s ‘obvious’ to you, me, and the rest of the choir here — because it easily meshes with our (correct) view of economics & politics.

The NY Times crowd has an opposite view — so they mentally ‘frame’ the issue differently. In psychology, it’s known as “Confirmation Bias” — a tendency to interpret new information in a way that confirms one’s preconceptions and avoids information and interpretations which contradict prior beliefs. It’s a major and common human failing that’s been noted for centuries — a huge obstacle to critical thinking everywhere.

The NY Times folks ‘know’ that capitalism is a useful but dangerous system… that must be carefully watched & controlled by the almost-always wise & noble force of government. They automatically see our current financial mess as proof-positive that free-markets eventually fail — and must be rescued by the selfless White Knights of government. Nothing will change that basic view… especially hard facts.

A severe world economic depression might prompt them to reluctantly & temporarily listen a bit to Austrian Economic solutions (… like a desperate cancer patient embracing any possible cure) — but their fundamental belief system will remain unchanged.

“It ain’t what you say that counts, it’s what they hear.” (– Red Auerbach)

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