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  • Morning Bell: Who Will Defend Free Markets?

    If you thought passage of last week’s $700 billion Wall Street bailout meant Congress would get out of Washington, you’re not that lucky. Determined to pin the credit crunch on free markets, Chairman Henry Waxman (D-CA) has announced a whole month’s worth of hearings in the House Oversight and Government Reform on the “financial meltdown.” For Waxman and his fellow travelers on the left, the past two weeks mark the collapse of capitalism due to deregulation. Nothing could be further from the truth.

    First of all, by every quantifiable measure, regulation has increased under President Bush:

    In total, the federal government imposes a nearly $1.1 trillion regulatory burden on the American people every year. Many of these regulations are justified. Providing transparency and creating information are value-added government functions. Regulation is not per se inconsistent with market principles. Some reinforce property rights and market mechanisms.

    But creating a massive government duopoly in the residential real estate market does not reinforce market mechanisms. It perverts them, and it perverts them to such a degree that some estimate that Freddie Mac and Fannie Mae purchased more than a third of the $3 trillion in junk mortgages created during the housing bubble. They did so because heavy government regulation required them to push as much money into questionable mortgage buyers as possible. As Ronald Reagan said in his 1981 inaugural address: “Government is not the solution to our problem; government is the problem.”

    The free market needs defenders like Reagan now more than ever. As Washington Post columnist Sebastian Mallaby writes today:

    [B]laming deregulation for the financial mess is misguided. But it is dangerous, too, because one of the big challenges for the next president will be to defend markets against the inevitable backlash that follows this crisis. Even before finance went haywire, the Doha trade negotiations had collapsed; wage stagnation for middle-class Americans had raised legitimate questions about whom the market system served; and the food-price spike had driven many emerging economies to give up on global agricultural markets as a source of food security. Coming on top of all these challenges, the financial turmoil is bound to intensify skepticism about markets. Framing the mess as the product of deregulation will make the backlash nastier.

    The American people still believe in this message. According to Rasmussen Reports, 59% of Americans agree with Reagan’s verdict that government is the problem. But that does not mean we should abolish government; just keep it limited to a smaller role. In that same address, Reagan also said: “Now, so there will be no misunderstanding, it’s not my intention to do away with government. It is rather to make it work — work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.”

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    9 Responses to Morning Bell: Who Will Defend Free Markets?

    1. Brad, Phx says:

      We are continually bombarded, specifically by those legislators currently holding office, that they "vote with their heart,""they vote with what they think is the right decision for the country." WRONG, WRONG, WRONG! This is a Republic. These and every person in the U.S.Congress, State, County and local governments are representatives of the VOICE of their constiuents. We don't care what is in their heart, stomach or any were else. Here in lies the problem with not having severe enough term limits. Our representatives begin to take on too much "political baggage" the longer they remain in office. Then they begin to think and vote with their 'hearts' and are no longer the "representative" of their districts;i.e. "no longer any value for the job in which they were ELECTED!

      KEEP OUR GOVT FRESH!

      THX

    2. Don Burns, Duluth, G says:

      Why is the H.F. promoting Fred Barnes when he calls Conservatices "stupid" for opposing Socialism?

    3. DCWike, Virginia says:

      Health care fraud and government slack is one of the biggest costs to Americans.

      Example: When I was working and had health insurance, doctors doubled their fees for regular visits. When I was not working and had to pay for such, the fees were only half what the doctor charged insurance companies.

      When it comes to prescription medicines, tell me why, when it costs only seven cents from production to delivery per pill (Singulair) it costs the consumer over $100 for a 30-day supply of the much needed medication?

      I am disabled now, at 58 years of age. I receive $809 per month from Social Security. Medicaid pays my Medicare premiums and my co-pay for prescriptions (11) costs range from $2 – $5.35, not to mention my rent and electricity ranges from $800 – $1,000 per month. If my daughter would not be living with me (she's on disability, too and gets less than I do), we'd be homeless. Oh, and I am lucky enough to qualify for $91 per month for food assistance.

      There's something wrong with the "system," that's for sure.

      There are non-citizens here that get more benefits than I do and I worked all my life (part time work as a teenager and full time work since I was 18), paying taxes, and this is what I get for it?

      We have elected people into office who are in it for their own gain rather than for the people of the United States. They can vote themselves raises and qualify for life time pensions for serving two years – not to mention the most elite health care benefits.

      Why cannot such health care benefits be available for regular citizens at affordable rates – based on income?

    4. RickFromMichigan says:

      If the congress decided to suspend democracy on the bailout,since it was at least 20-1 against it,what makes people believe they will do one single thing for us? I'm sure if they would have listened to us the dow would have dropped much lower than the 700 points it lost today.Financial or otherwise I'm currently looking at the Dow and I realize just how much wiser they are than the American people.

    5. Duke Lynch Redding C says:

      Two requirements for political candidates;1)must swear, under oath, to tell the truth at all times.2) listening to smear tactics, should not all candidates be vetted by FBI before running?

    6. BYRON, FAIRFAX says:

      there is no one to defend free markets in the current administration. and unfortunately as I get older i dont think Reagan was all that much a defender of free markets either. as the example of his quote. government is supposed to do one thing and that is protect us from foreign enemies.

      we have gone so far down the road to that the statement from Reagan seems like a breath of fresh air. But governement should have no part in helping us it should be in the backround not at our side as an equal it should be subserviant to the people.

    7. Victoria, Florida says:

      The "REAL HEROES" are those who have the interest at heart for others, rather then for themselves. Charles Dickens starts his novel David Copperfield with this line." Whether I shall turn to be the hero of my own life, or whether that station will be held by anyone else, these pages must show." The literal meaning of hero is "protector" or guardian."I am very much aware as an American, that the sinfull nature of men is still at work in each and every one. Unless men, has the Spirit of Jesus Christ in their lives, nothing will change for those who are determined to destroy this Nation Under God. Those who are in the spirit of greed, and have the attitude of I, I, I and the rest of the Nation can die will only reap their own demise. My concept of a hero is not shaped by culture and the entertainment industy. Even history skews the idea of what it takes to be a hero. Heroes are everyday men and women, boys and girls who live by faith in Jesus Christ. A hero is a business person who engages in fair business practice with everyone. Heroes are regular everday people who have experienced the joy of salvation in Jesus Christ and courageously use their lives to serve God and to built up the life of their neighbour. In my opinion a lot of our politicians are caught up in the greed syndrom of our times and their hearts are harden by their selfish behavior.

    8. Dolores, New Orleans says:

      We are in this mess because Congress wouldn't listen to McCain and other Republican warnings. And the liberal media is helping the liberal Obama get in. We Americans need to fight for less government, not more. We are taxed too much now. Wake up America! Demand our elected officials to prosecute the executives of Fannie Mae and Freddie Mac. If Obama gets elected as President this country is going to try to control every section of our lives.

      Nancy Pelosi is a joke. She needs to be run out of office. Republicans WAKE UP AND FIGHT FOR LESS GOVERNMENT! Obama doesn't have a clue as to what to do about anything. There isn't a snowballs chance in hell he's going to keep all his promises. I want specifics from both candidates and quit giving us the crap.

    9. PacificGatePost says:

      A NEEDED FIX IN THE BOARD ROOMS

      In't it time the system went in for some much needed repair?

      Due diligence and oversight long ago slid out the window. No one was watching.

      Time to do something about it.

      Here's a huge one they all missed…. The dramatic change that swept through all of North America's boardrooms over the past 30 years. It is one of the underlying causes of the headache the economy is now feeling, but more importantly, it has resulted in the general feeling of "disconnect" by most Americans.

      "WE THE SHAREHOLDERS OF YOUR COMPANIES……

      http://pacificgatepost.blogspot.com/2008/03/lette

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