Post-to-Post AM

Arianna Huffington adopts my rhetoric (yes, I know she’s never heard me, but I’ve been calling for socialists and central planners to be relegated to midnight radio for years):

It's time to drive the final nail into the coffin of laissez-faire capitalism by treating it like the discredited ideology it inarguably is. If not, the Dr. Frankensteins of the right will surely try to revive the monster and send it marauding through our economy once again.

We've only just begun to bury the financially dead, and the free market fundamentalists are already looking to deflect the blame.

In a comprehensive piece on what led to the mortgage crisis and the subsequent financial meltdown, the New York Times shows how the Bush administration's devotion to unregulated markets was a primary cause of our economy to ruin. But the otherwise fascinating piece puts too much focus on the "mistakes" the Bush team made by not paying attention to the warning signs popping up all around them.

"There is no question we did not recognize the severity of the problems," claimed Al Hubbard, Bush's former chief economic adviser. "Had we, we would have attacked them."

But the mistake wasn't in not recognizing the "severity of the problems" -- the mistake was the ideology that led to the problems. Communism didn't fail because Soviet leaders didn't execute it well enough. Same with free market fundamentalism. In fact, Bush and his team did a bang-up job executing a defective theory. The problem wasn't just the bathwater; the baby itself is rotten to the core.

She has the right style, but her target selection is anti-logical. I can’t even be sure of her point, as she opens her blather with an affirmation of the failure of planned economies. Marxism has failed, we agree.

But to argue that a President who has consistently expanded the Federal Register, while raising tax collections and growing entitlement spending faster than any of his 42 predecesors, is a free-marketeer is ludicrous. Huffington is drinking the same bizarro juice as George W. Bailout. Did she not notice the President jabbing his fat Federal fist into nearly everything over the last eight years? Prescription drugs, digital TV, mandatory light bulbs…everything but an FDA mandate on toilet paper usage. Or his lunatic admission last week, “I've abandoned free-market principles to save the free-market system.”

Now at least he’s being honest. He abandoned free-market governance as soon as he finishing taking the oath of office. Principles are just the lies we tell ourselves; actions matter.

I suggest Huffington’s problem (here) is that she doesn’t understand the free-market principles our current President has recently abandoned. She argues that market fundamentalists didn’t execute well enough. But one cannot “execute” a market. No government office or official can be involved in “laissez faire”, which means “let it be”.

A market is a negotiation. When a non-trader enters the market with regulations and commands, that market loses freedom. The negotiations become distorted. The agents are no longer trying just to get their needs met, they’re additionally burdened with compliance to and by coercion from that non-trading interloper.

Huffington is logically inconsistent to assert that an improper or ineffective or insufficient intervention is a market failure. It is actually a government failure.The government had some goal, and it failed in achieving it. The agents in the market (that’s us)—we made the best deals we could amidst all the meddling.

Marxism is intellectually dead, a demonstrated economic failure. Huffington says what Bush has attempted is also a failure. If Bush was truly a free-market fundamentalist, Huffington leaves herself nowhere to stand. Planning failed, and freedom failed. What’s left? Mysticism? Conspiracy theories?

Arianna Huffington is ready for midnight radio herself. She could pioneer the discussion of paranormal economics. Untethered by reason, the world can be whatever her mind wants it to be.