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March 31, 2009

Am I still an angry young man?

I remember being at the Cato institute summer seminar in summer of 2001 and experiencing ferocious and visceral anger at the totalitarian actions of the state. I had recently taken Preston Covey's Conflict and Dispute Resolution class and I burned with rage over the government's action in Ruby Ridge and Waco. The government had recently won some major victories against the people's ability to buy and consume inexpensive tobacco under the guise of public financing of health care, and I felt righteous anger at the enormous domination of the state over our rights to life, liberty and happiness.

I don't spend as much time being angry these days. My disposition is generally happy, and it doesn't feel good to experience all that rage. Once in banking and continuing into my research, I was able to focus my intellectual efforts on areas where I could make a difference and it made me happier and perhaps calmer. The stakes may be far lower but the likelihood of changing the outcomes are far higher.

The time for anger has returned. The money being misused today is so enormous that if you aren't angry you are probably either a net beneficiary of that money or more likely just not paying attention.

Serious people are suggesting that if we fail to allow the major banks to fail we will enter financial Armageddon with the tiniest of evidence. They are using the fear of this outcome as justification for trillions of dollars of expenditures. These fears must not be indulged. Better to clean up the mess afterwards.

Trade barriers are rising. Trade is unquestionably the single most powerful force in transforming from the natural state of poverty and pain us from poor to rich. To allow the poor of the world to suffer so that (for example) teamsters in the southwest can make $40 an hour instead of $30 is monstrous. It is hard to think of anything less liberal than using the totalitarian power of the state to protecting rich workers at the expense of peaceful poor ones. This is the worst sort of nationalism and must be stopped.

Taxes are going up and government policies, no matter how ineffective, costly, or how unjustly they reward some minority, they so rarely seem to disapear. Say no. Demand a smaller, cheaper government where bad policies die and tax distinctions aren't made between those who by any global standard are among the wealthiest people on earth.

People are talking about changing the regulatory environment as though if only we had the right smart and thoughtful people in charge we could have avoided this crisis and prevented future ones. Yet no large economy has proven safe. Demand a realistic epistemology of regulation. Regulators face the same limits of knowledge that producers and consumers do. Anticipating things is hard and punishing people after the fact is unjust. Better to encourage a world where people work hard, keep much of what they make, and suffer the consequences of their mistakes.

Therefore, I'm angry and you should be too. I can't spend all my time being angry. However, it is important that honest men stand up and say that this stinks, that the current system is wrong and the proposed solutions of our leaders will mostly make our lives worse.

It isn't all bad. There is some hope on the freedom front. I'm especially pleased with the Obama administrations policy on medical marijuana in California and the repeal of the Rockefeller drug laws in NY State. Nevertheless, it is hard to see this crisis as anything other than a substantial victory for statism.

P.S.
The final motivation for this post was Cowen's post, The People's Pottage. It seems that billions will be given to GM dealers to motivate them to renegotiate their contracts with GM and close. In bankruptcy they would get little or nothing. Remember that next time Obama talks about an making the economy fairer.

Posted by OneEyedMan at March 31, 2009 10:35 AM

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