Wall Street Journal Just Doesn't Get It and Praise to Those Senators who Voted "No" on the Bailout Bill
The Wall Street Journal uses the following reasoning to support the bailout bill:
"Our point isn't to absolve Wall Street or Washington -- far from it. The point is that credit manias are by their very nature societal, which is why the panics that follow can do so much damage to Americans outside the financial arena. They are part of a larger psychology that sweeps everyone up in euphoria for a time, only to send everyone into a defensive crouch when the credit stops.
The challenge at such a moment is to prevent a panic from becoming a crash that does far more extensive damage. This is where we are now, and this is why the House should pass the bill that passed the Senate last night, even with its flaws. The government needs the power to use public capital to defend and stabilize the financial system. In that sense, we are really bailing out ourselves."
The WSJ is right that no one should absolve Wall Street or Washington of their sins. The free market has already punished Wall Street for its shady business practices and will continue to do so if left unfettered by the federal government, which is full of populist demagogues who don't understand economic principles. However, the government will not let the free market properly punish its cronies in the free market, which means that the free market will become more distorted and unfree. How many times do we have to mention that the government created Freddie Mac and Fannie Mae? How many times do we have to point out that Congress propped up and shielded their cronies from market competition.
The problem with the logic of the WSJ is that the government never has any accountability. Yet, the WSJ insists that we as taxpayers should trust the very institution which messed up the market in the first place to fix it. The logic does not follow at all. In fact, it is absurd to trust a thieve to put money back into the very bank he robbed, but this is the logic of those who believe in the myth of a beneficent government. There is a reason the founders didn't trust government, and it was to restrain the government from gaining too much power. It was to prevent moments like this.
There is another fallacy in the logic of the WSJ. The writer assumes that a crash is a bad thing. Maybe a crash is needed to get the government out of the free market. Maybe a crash will lead to better business practices in the future. Maybe it will show entrepreneurs that certain risks aren't worth taking. Maybe it will lead to a stronger free market in the long-run. Maybe the government caused the crash. Of course, it takes elitists to believe that the government can even undertake such a mammoth effort to stabilize the financial system. Who is qualified to do such a thing anyhow? Is there anyone that can predict all the forces of the free market well enough to regulate it? Only those who don't understand economics can possibly come up with something so illogical.
Having said that, I would like to thank those Senators who voted "No" on the Bailout Bill for whatever reasons they had:
Allard (R)
Barasso (R)
Brownback (R)
Bunning (R)
Cantwell (D)
Cochran (R)
Crapo (R)
DeMint (R)
Dole (R)
Dorgan (D)
Enzi (R)
Feingold (D)
Inhofe (R)
Johnson (D)
Landrieu (D)
Nelson (FL) (D)
Roberts (R)
Sanders (I)
Sessions (R)
Shelby (R)
Stabenow (D)
Tester (D)
Vitter (R)
Wicker (R)
Wyden (D)
I have a hard time believing all of these people want to protect the free market, especially those with a (D) by their names, but I'd like to praise them anyhow for standing up to big government. This is the road to serfdom, folks. Enjoy the ride.
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