More of the Same: Brookings Spews Regulation Rhetoric on Capitol Hill

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I cannot help but wonder – and on most days dread with a worrisome fear – when we as individuals will begin to see through the smoke and mirrors that now (and has for some time) places our government in direct opposition to our true interests of liberty and, for most of us, a comfortable living.  This morning I was rereading Milton Friedman’s discussion of the Federal Reserve System and the government’s proper role as a monetary authority.  He states quite succinctly that no government ought to act as sole arbiter of its nation’s economic activity via its currency.  Moreover, the new rallying cry for government involvement is the long-held belief that economic stability, i.e. modest growth and the blunting of the boom-and-bust phenomenon, demands government regulation at every turn of the financial wheel.

“These arguments,” he states, “are thoroughly misleading.  The fact is that the Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy….What we urgently need, for both economic stability and growth, is a reduction of government intervention [sic] not an increase” (Capitalism and Freedom, pp. 37-38).

Inherent in the regulatory-rationale is that the market is naturally chaotic, and without government controls, is destined to crash, leaving the fate of millions gasping within the invisible hand once thought to be the bastion of Western democratic principles.  Yet, since Friedman’s declaration against government encroachment upon the economy nearly fifty years ago, we have seen nothing but more of the same in the way of government engineering in economic matters. Moreover, the rationale behind such utterances against liberty have changed little.

Today the Brookings Institute put out in its newsletter a copy of Michael Barr’s (Nonresident Senior Fellow of Economic Studies) testimony to both the House Subcommittee on Financial Institutions and Consumer Credit of the House Committee on Financial Services.  Although addressed to our nation’s elite, his opening statement is nothing less than a testimony to the people that Friedman’s message has been little received.

“Over two years ago, the United States and the global economy faced the worst economic crisis since the Great Depression.  The crisis was rooted in years of unconstrained excess on Wall Street, and prolonged complacency in Washington and major financial capitals around the world.  The crisis made painfully clear what we should have always known–that finance cannot be left to regulate itself; that consumer markets permitted to profit on the basis of tricks and traps rather than to compete on the basis of price and quality, will, ultimately, put us all at risk; that financial markets function best where there are clear rules, transparency and accountability; and that markets break down, sometimes catastrophically, where there are not.”

What I say to this and to any readers out there who feel bound by our leaders’ continued fear-mongering of economic stability is simply that since the era of progressivism, markets have never been left to themselves.  There has always been government interference in the marketplace, whether revealed to the public or not.  Consequently, I am forced to agree with Mr. Barr on one crucial point, that of accountability and transparency.  However, what America needs is not accountability and transparency in the market – left alone, advances in technology have enable consumers to make better informed decisions about products they buy than at any other time in history.  Rather, what America needs is an accountable and transparent legislature not beholden to financial interests, ready to dispense with its redundant regulatory rhetoric meant to whip up a frenzy among a largely ignorant public, and most importantly, one bent on regulating not the economy but themselves.

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Article first published on Technorati

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About Jeremiah Dow
I have a B.S. in Politics, Philosophy, and Economics with a minor in Economics. I finished school in 2010 and am currently working on independent research in various areas including political and economic philosophy, government, and history. I am also currently looking for work in research, particularly the social sciences dealing with public policy work. I aspire to a top-level graduate institution, but would first prefer some professional research experience. Some of my primary influences are Ayn Rand, Noam Chomsky, and Howard Zinn among others.

One Response to More of the Same: Brookings Spews Regulation Rhetoric on Capitol Hill

  1. tony says:

    As always you’re spot on. Keep it coming, love reading your stuff.

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