Tuesday, March 18, 2008

Cafeteria Conservatives

David Brooks writes,
So I guess we’re all bailout artists now?

We do seem to have reached some Bernanke-era consensus. In normal times, the free market works well. But in a crisis like this one, few are willing to sit back and let the market find its own equilibrium.
This is consistent with many, probably most, modern "conservatives" - free markets are great when an individual is having a house foreclosed, is drowning in credit card debt, or is bankrupted by medical costs. They're horrible when a large business may fail, and the government had best be fast with a handout.

It's pretty standard for the "there are two types of people" crowd - they latch on to an ideology that purportedly makes them superior to those they oppose ("Conservatives favor free markets; liberals favor handouts"), but make little to no effort to consistently apply those principles. When multi-billion dollar subsidies are handed out to energy companies, even as those companies enjoy record profits, well, that can be ignored. When the markets catch up with a poorly managed company, the market principles that they supposedly embrace can suddenly be ignored because "this is different".

You know what? It goes both ways. I call myself "cheap", my wife says I'm "frugal". But I'm fiscally conservative, in a small "c" sense. I don't like to hand out my money to anyone. I am much more willing to offer people help when they are in a fix that is not of their own making. So I'm much more sympathetic to the financial plight of somebody who is drowning in medical debt than somebody who is drowning in credit card debt arising from self-indulgent spending. I'm not at all sympathetic to the idea that people who are at the top of the economic pyramid need government handouts. Yet that's the Republican approach to energy companies, and corporate welfare in general.

I see the current crisis among financial institutions as analogous to that self-indulgent credit card debt - and view it as unfortunate that the incompetence and corruption involved is on such a large scale that we can't just "let the market take its course." But I see few signs that the Republican Party or the supposedly pro-market leaders of those institutions share my sentiments - at least when their millions are on the line. Citi Group was no doubt lobbying hard for the Bankruptcy Reform Act, to keep people from discharging credit card debt - but it would no doubt leap at its first opportunity to have the government subsidize its debts and nationalize its losses. What would a self-professed "free-market conservative" call such a bailout? Probably something like "bipartisan stimulation".

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