Let’s hear it for Hayek:
“The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception.”
— Fredrich August von Hayek (1899-1992), Nobel Laureate of Economic Sciences 1974
In the midst of backhandedly congratulating tea partiers, NYT’s David Brooks has this:
Voters are upset about the economy, the debt and the culture of Washington. The Democrats are the party of government and of the status quo. They have done their best to remind people of that. This week, Democratic voters renominated Charles Rangel, the epitome of Washington scandal. Democratic voters in the District of Columbia ousted Mayor Adrian Fenty, one of the nation’s bravest education reformers, and replaced him with an orthodox pol.
But those are black voters, are they not, for whom blood is thicker than — what? common sense? I’d say so, in view of how harmful economic policy always hurts lower– more than higher-income people.
Thing is, you got to let people do as they please. That’s the way to economic boom. Let them do it! Laissez faire, as the French say. They have a way with words.
It’s the first thing that socialists don’t get. Gummint does not help.
As harsh as that is, it may be the only way to keep Proviso East from succumbing to the problems that have ruined some Chicago public schools.
“[T]hese [expellees] are not the students that we should be focusing our resources on. There are 5,000 other students who are coming to school. We are not going to tolerate the kind of violence that was displayed in this case.”
The bailout has been controversial. Senior Obama adviser Valerie Jarrett served on a Chicago civic organization with a director of the bank, and President Obama himself has singled out the bank for praise in lending to low-income communities.
But the bank has made its share of bad bets, and some of the Wall Street firms that have given money have said they’ve received political pressure to contribute to the bailout of a business that under normal circumstances would have been left to fail
Can this be crony capitalism?
Where’s this distinction been all my life?
State capitalism has been tried before. It didn’t work. Market capitalism works better because it doesn’t depend on one set of actors to make all the choices.
The estimable Michael Barone here. He speaks of “the limits of expert knowledge and of the ability of political actors to make optimal economic choices.” Brain trusts and all that, vs. billions deciding and moving, even shaking, the world.
“Intellectual firepower” vs. The People’s choices.
(From: Instapundit)
Don Boudreaux of Cafe Hayek writes letters to newspapers, copying them to the site he and other economists from George Mason U. operate. His latest, to Wall Street Journal, demurs from WSJ auto-industry writer Paul Ingrassia’s joy in what he says is the successful bailout of GM and Chrysler.
A year and a half is not long enough to draw such a conclusion, says Boudreaux.
Second – and more importantly – the chief economic case against the bailout was not that huge infusions of taxpayer funds and special exemptions from bankruptcy rules could not make G.M. and Chrysler profitable. Of course they could.
Yes, throw money at a money-shortage program and you get results.
Instead, the heart of the case against the bailout is that it saps the life-blood of entrepreneurial capitalism. The bailout reinforces the debilitating precedent of protecting firms deemed ‘too big to fail.’
How so?
Capital and other resources are thus kept glued by politics to familiar lines of production, thus impeding entrepreneurial initiative that would have otherwise redeployed these resources into newer, more-dynamic, and more productive industries. [italics added]
It’s a play-it-safe solution, a conservative one, as opposed to a classical liberal one that respects and encourages ingenuity. One that Friedrich Hayek would recommend.
In short:
The ‘success’ of the bailout is all too easy to engineer and to see. The cost of the bailout – the industries, the jobs, and the outputs that are never created – is impossible to see, but nevertheless real.
What can be seen, on the other hand, is continued high pension and benefits for members of the United Auto Workers, a union that loves Dems because they protect their (narrow) interests.
In hard times, union hardball has no traction:
With one of its two elementary schools crippled by a stalled construction project, the school board of River Forest Elementary School District 90 voted this morning to cancel a union contract and bring in a non-union company to finish the job.
Look. The working man is not just the union member, who in this case is killing jobs for himself and his brothers and sisters. When will they ever learn?
Thing is, this school board depends not a whit on labor money.
Blithe Spirit 