On my way home from work this afternoon, I was flipping through the stations on the AM dial, listening to afternoon talk radio discuss the proposed bailout. The majority of callers were against the plan, but many of the allegedly conservative hosts were supporting it, if only grudgingly. For example, Michael Medved stated that although the free market is always superior to command and control economies, he nevertheless believes that the government should absolutely step in and intervene when necessary. He cited the FDIC and the savings and loan bailout of the 1980s as examples of “legitimate” interventions. Similarly, Glenn Beck posted an editorial on CNN.com earlier in which he claims that the bailout package is absolutely required, even though it’s a horrible idea.
But when it comes to sheer economic ignorance, neither Medved nor Beck can hold a candle to local Dallas-area talk show host Jon-David Wells. Wells, who is skeptical of the Paulson bailout but will no doubt get behind whatever stupid plan is inevitably enacted, spoke with a caller who pointed out the fact that these boom and bust cycles are caused by the Fed through its policy of inflationary credit expansion. Wells dismissed the caller, and claimed that anyone who suggested we should do away with the Fed was crazy. He went even further, saying that the economy would completely collapse, à la the Soviet Union! Here is a guy who thinks that the absence of a central bank would be like communism, even though one of the central planks of the communist manifesto is to create and control a central bank. Even though the Fed’s raison d‘être is to artificially set the price of money, just like a central Soviet economic planning board would arbitrarily set the prices of commodities. Even though Alan Greenspan agreed with Ron Paul that if you have a central bank, you don’t have a free market!
I’m amazed at the rapidity with which even those who believe themselves to be defenders of the free market over big government are jettisoning their principles in order to support this bailout. In effect, what they’re saying is, “Sure, the free market beats command and control economies every single time, but when things get tough, what we really need is socialism.” (For a truly excellent critique of the bailout plan, check out Ron Paul’s Campaign for Liberty blog).
As I have written in this column many times before, the GOP’s standard bearer, John McCain, denigrates private enterprise and the capitalist system every time he opens his mouth. But not to worry, he’s putting everything else on hold to go back to D.C. to fix the problem, and has challenged Barack Obama to do the same. Although I think McCain got the drop on Obama politically with this little stunt, I’d rather have these two nimrods debating in Mississippi rather than in Washington. They can do much less damage in Oxford.
All of this wailing and gnashing of teeth underscores once again the importance of philosophy, particularly for those on the right. It’s not good enough simply to watch the news and have opinions about the issues. You have to understand why you have those opinions, because if you don’t, you’re liable to be swayed by any passing fad, issue, or crisis.
I think that’s why the GOP is in such disarray right now. If you were to ask a self-described “conservative” if they favored small government or big government, he’d say, “Small government, of course.” But then if you asked why he favored small government, he’d be completely flummoxed. By not having a unified, coherent philosophy based on first principles, conservatives have lost sight of what is was they were supposed to be conserving, which is namely individual liberty with the Constitution as its protector.
And without that bedrock philosophical foundation, there is functionally no barrier to the growth of government. The concepts of liberty which used to animate Americans have been so completely lost that, as Don A. Rich writes, even those on Wall Street applaud as the government moves in to nationalize the financial sector. But as those of us who are familiar with the Austrian theory of the trade cycle understand, further intervention in the markets will only create greater problems down the road. Perhaps the next crisis will be severe enough to get people to stop cheering capitalism’s demise. Who knows? At that point, maybe those who consider themselves defenders of the free market will even start to act like it.
