Friday, October 31, 2008

It's Dues Paying Time

Carl Haefling has one of the best articles I've seen on the current economic crisis and its potential consequences:

Carl Haefling on Paying Your Dues

The hard lesson learned, and this seems to keep repeating itself, is that in a Capitalistic economy if there is a good idea that creates wealth quickly, it will be identified, copied and mass created until it creates failure. We have seen that happen over and over in the financial markets and with corporations who are successful for a period of time and almost inevitably fail. Demand destruction has effectively ruined Bear Stearns, Lehman Brothers, hundreds if not thousands of mortgage companies, and forced banks and related businesses into merger or bankruptcy. More and more companies will go out of business, the unemployment levels will expand, and there is little that Obama or McCain can do about it. The decisions made by the Bush Administration and the Fed have drastically reduced our choices in funding our financial obligations and the various programs that our citizens have become accustomed to.

It is now dues paying time.

Mr. Haefling also has some choice words for libertarians:

Libertarians for the most part believe that the higher nature of humanity will surface and ultimately allow for a free market to prevail. I believe that is naive at best.

Ouch. I don't think libertarians believe the "higher nature of humanity" will surface in a crisis. It's the other way around, actually. The lower nature of humanity will lead to mistakes, and we have two choices: one, increase government and its interference into our private lives; or two, accept the consequences of our mistakes without burdening those who did not participate in our follies.

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