I know critiquing neocons for market interference is nothing new, but right now it is just so crazy. Let’s recap the last few weeks.
Hoping to avoid a big drop in the financial markets, the fed subsidizes Chase’s buy out of Bear Sterns, externalizing most of the losses from bad business decisions or unlucky investments or failure to diversify or whatever you want to call it. Bear Sterns is not saved but how cool for Chase? They get this big new company and none of the downside risks and costs.
Oh, and when the economy is faltering let’s give rebates to try to tinker with all kinds of markets.
Don’t forget helping people who bought mortgages on the free market that they now cannot afford.
And, just the last one for now, all the tinkering we do with interest rates in reaction to all kinds of market faltering or chaging.
Don’t get me wrong, I am not against helping mortgage buyers who may have been duped by greedy mortgage brokers who lied to them (hey, how about some regulation with enforcement?). I am just saying, why do we even pretend that there is such a thing as free markets? It is hard for me to hear the talk of free markets without giggling. WHat am I missing? Why doesn’t everyone just laugh when free market lingo is used to justify Chinese imports of cheap stuff? Or when it is used to resist helping individual home owners/mortgage holders but not Bear Stearns?
What am I missing?