In a recent back-and-forth with long-time favorite tech guru Fred Langa, precipitated by the topic of science funding, I'd been defending limited government, free markets and the principled, consistent, predictable rule of law. I'd started to post this there, but decided it was getting long enough for a post of my own...
Half-listening to 'The Exchange' this morning, I thought I'd offer you one related example of profoundly bad consequences from hubristic government not sticking to its Constitutional mandate.
The housing bubble was clearly not sustainable free-market profit. But the cause wasn't simply "greedy capitalists." An interfering government had chosen to put its thumb on the scale, and had guaranteed (well, taxpayers did, right?) increasingly high-risk mortgage investment for (initially) the privatized short-term "profits" of higher poll numbers and vote counts since at least as far back as Truman's "Rural Housing Guaranteed Loan Program", to Carter's "Community Reinvestment Act", and continued through Bush's "ownership society".
These were borrowers that unmanipulated, naturally "risk/reward"-sensitive free-market capitalists would have avoided (not because they were poor, but because they were demonstrably bad or at the very least entirely unknown credit risks, and you wouldn't lend them that much money, either). Or they would have better-balanced the commerce equation than government does because, you know, they would have actually been directly responsible (to thus-cranky stakeholders, like, say, your mother's retirement account) for the likely losses.
But the banks naturally factored the data point of government's corrupting, coercive incentives into their economic calculations. And so the artificially high demand of many more "qualified" buyers chasing limited goods quite predictably increased home prices, thus actually helping to deny home ownership to fiscally responsible lower-income households (gosh, who could have seen that coming...?). And thus also encouraged mal-investment of limited (as opposed to infinite) resources into accelerated home construction (the supply side of the standard economics equation).
When the people who shouldn't have had mortgages in the first place began to do the inevitable, so did the house of cards. Now the private losses precipitated by government interference in what would otherwise have been rational and sustainable economic decisions are socialized by passing the bill on to the taxpayers.
So the banks get bailed out because government thinks it knows better than markets (that's you, btw), and made unauthorized promises in your name. And yet, the 2 major parties -- and usually the very incumbents -- responsible will still win virtually every single election into the future. And we can do it all over again, maybe this time with health care.
In my best Jubal Early, does that seem right to you...?