In this Christian Science Monitor/ December 28, 2009 essay Arnold Kling and Nick Schulz argue that only free and open markets, not government regulation, can clean up the mess that markets sometimes make. Unfortunately, none of their common sense will rub off on the Obama administration because they are all solidly behind the view that only the technocrats - they themselves - can save Americans from the mess that the markets have purportedly led us into.
Two camps have fought the political and philosophical battle for influence over the economy in the United States for the past 100 years. They differ in their views over the nature of markets and government. And both are wrong.
One camp makes it sound as if markets can do no wrong. Their views were ascendant in the 1920s and again in the 1980s.
The other camp argues, “Markets fail, and that’s why we need government.” The idea is that markets are prone to excesses and imbalances and need the thoughtful, steadying hand of government to protect consumers and investors from flaws and uncertainties of the market. This camp believes that wise technocrats can and will bring order to the markets.
BERK: Experts here there and everywhere in the Obama Administration. So many experts, but not enough leaders. To paraphrase Barney Frank as I listened to him during the final years of the Bush II administration: "The 'wise technocrat ideology' crowd ought to watch out because the people are beginning to catch on that they talk a good game but don't govern too well"
Less Than 10% of Obama's administration has private sector experience.
Do not let anyone tell you again that Obama is willing to surround himself with people of differing views. Remember the talk about Obama appointing a team of rivals. HereObama referred to"a wonderful book written by Doris Kearns Goodwin called Team of Rivals in which [she] talked about [how] Lincoln basically pulled in all the people who had been running against him into his Cabinet because whatever, you know, personal feelings there were, the issue was, 'How can we get this country through this time of crisis?'"
I know that Hillary Clinton, his former Democratic Party rival, is his Secretary of State. But in what sense can we say that Obama has hired a team that rivals his worldview about the role of government in the private economy when so few have ever had a job that did not depend on public funding, an endowment at a university or a government grant to pursue some program?
Most of this crowd subscribe to the theory that since markets fail, a big government is necessary to protect investors and consumers from the uncertainties of those markets. There is no law or regulation that cannot protect Americans from the vagaries of the market - the experts know best.
From the rhetoric at least they seem to believe that the other camp - the markets can do no wrong crowd - have nothing to offer because of the purported failures of the market in 2007 and 2008. It looks like it will be difficult to change their minds since they keep echoing the same nonsense about government this and that. Not encouraging to say the last.
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