A Free Market Beheading
With its 900-point “bargain basement” explosion yesterday, the U.S. stock market is (for now) resisting the doomsday predictions that seemed so pervasive just days ago. Though there’s no telling what this week’s closing bell will bring, it appears that the first wave of volatility and pessimism have passed.
Don’t breath a sigh of relief just yet, though.
The market’s resiliency is - at this point - more worrying than a plunge.
Counterintuitive though it may seem, a free fall is just what the “streets” - both Wall and Main - need right now.
That the market is not in a free fall (again, for now) would seem to presage the success of the “mother of all bailouts” - but not in the way Washington politicians want you to believe.
People are already saying that the $700+ billion bailout is now working just as intended: The market is up, investors have calmed, and the economy seems to be easing back on track.
Conspicuously absent from that rosy picture is the influence of capitalism - a force which, once the linchpin of American inertia, has come to a screeching halt.
Every metric around us - national debt, personal debt, inflation, unemployment, interest rates, bank health - points to an ebb in the U.S. economy.
And left to its own devices, the economy would (and probably will still) ebb.
But socialism, ever the watchful nanny, has taken the economy by the hand, leading Americans away from the only thing it has known - the very thing that made it great - and toward a dependence the likes of which lies just off the Florida coast.
Risk is to capitalism what oxygen is to fire.
The government, backed by an electorate who begged its representatives to “do something,” killed capitalism when it cut it off from the risk it breathes.
Though capitalism took the fall, it’s the American people who’ll emerge as the real losers. We don’t mind risk, as long as it remains a concept. When risk dares to become loss, we run hiding among the skirts of our nanny, Fraulein Socialism.
It’s sort of like our credit culture … we don’t mind shelling out a couple hundred ducats for a new pair of kicks - it’s the credit card bill that annoys us (to the point we start ignoring it).
And, unlike capitalism, neither the command economy nor credit collectors are likely to leave us anytime soon.
Comments
By Ian on October 14th, 2008 at 1:26 am
But socialism, ever the watchful nanny, has taken the economy by the hand, leading Americans away from the only thing it has known - the very thing that made it great - and toward a dependence the likes of which lies just off the Florida coast.
By Joseph Reynolds on October 14th, 2008 at 9:17 am
BUt you miss the fact that true capitalism is totally absent from the picture you have painted. Please show me where you get rewarded for failure in capitalism?
The practice of paying bonuses for actions that had short term gain and long term consequences ultimatley led to the collapse. Throw in the huge compensation plans for senior executives, where even the number 5 guy is making over $10 million a year, that are indexed without any relationship to actual impact on the company, then finish it with golden parachutes that encourage executives to work on a 3 to 5 year horizon to encourage their ultimate “removal”.
Throw in the fact that being removed only opened the door to move next door in the continual merry go round of executive leadership where the borads are all comprised of rival executives who look out for each other, knowing that the guy they just “removed” sits on their board..
With those dynamics, how can you talk about “free market economy” with a straight face?