Our System Is Broken
Those of you who follow this know that my friend Jeff is a free market guy who thinks my faith in Government is pollyannish and sites legitimate examples of government stupidity and ineptitude to prove his point. I, on the other hand, think Jeff’s faith in people to act responsibly is naïve and site examples of corporate greed and malfeasance to prove my point.
I going to try and get him to agree that whichever system is better (free market vs. govt. regulation) our current system is the worst of both worlds and is fundamentally broken. I’m going to call it “crony capitalism” and use examples of recent disasters to highlight the problem.
The free market system fundamentally rests on the principle that the Market is self-governing because bad actors will be driven from the market. In short “the Market” is supposed to be like Samuel Jackson’s character in Pulp Fiction: a bad ass mother f^%^ker. However if we bail out the savings and loans (Reagan) and bail out the big banks (Bush), and whine that Obama is being “un-American” by bashing BP (Rand Paul) we have pretty much gutted that principle and given the bad actors a get out of jail free card. We have a Moral Hazard situation whereby we have insulated the bad actor from the risk of his/her bad behavior thus ensuring we get bad behavior. Any of us who are parents learned this when our first child hit two years old.
On the other hand we supposedly have government regulation, but if the government regulators don’t take their jobs seriously or can be chosen from the ranks of industry lobbyists or don’t philosophically believe in regulation, we got nothing. The disaster that was/is the Mineral Management Services and its well-documented graft/corruption (http://www.nytimes.com/2008/09/11/washington/11royalty.html) , and an energy policy written by industry lobbyists, all helped lead us to this BP oil spill disaster. If you rely on a principle of government regulation, but then not take it seriously, it’s like having a crooked cop – it’s worse than having no police at all. (Hell you might as well be letting terrorists and criminals buy guns at gun shows w/out background checks – thank you NRA!)
So Jeff, while I prefer responsible, competent, sensible government regulation because I’m cynical about the nature of my fellow man, I’d be willing to try a purely free market approach, but then it has to be the real deal. No “too big to fail”, no bailouts, and those responsible for this oil disaster (BP, TransOcean, Haliburton) get their asses kicked, and kicked hard.