A source of
tremendous frustration amid the financial carnage has been watching
the mainstream media exemplified by Jacob Weisberg — author of The
Libertarians’ Lament in The Big Idea section of the October
27, 2008 issue of Newsweek magazine — accuse libertarians
of failing to understand the financial crisis resulted from too
little government intervention not too much.
knows little if anything about Austrian economic theory or is a
naked statist or fails to realize the American economy operates
on the British economic philosophy of mercantilism, which for Weisberg’s
sake I will explain.
From the 16th
to the 18th centuries, mercantilism led to some of the
first instances of significant government intervention and control
over the economy, and it was during this period that much of the
modern capitalist system was established. The system encouraged
many wars and European imperialism. The founding fathers understood
mercantilism’s dangers, failings, and shortcomings and strove to
establish a true free market in the United States, free of government
intervention. The nation enjoyed such a true free market for most
of its history until the early 20th century when mercantilism
reared its ugly head disguised in part by the establishment of the
Federal Reserve in 1913.
financial crisis illustrates the failure of mercantilism not the
free market which is self-regulating but Weisberg either knowingly
fails to point out the distinction or is ignorant of the distinction.
He openly mocks
the arguments put forth by many libertarians that government intervention
in the marketplace is dangerous.
From The Libertarians’
Lament Weisberg writes, “One line of argument casts as villain the
Community Reinvestment Act, which prevents banks from ‘redlining’
minority neighborhoods as not creditworthy. Another theory blames
Fannie Mae and Freddie Mac for subsidizing and securitizing mortgages
with an implicit government guarantee. An alternate thesis is that
past bailouts encouraged investors to behave recklessly in anticipation
of a taxpayer rescue.” Weisberg continues “But libertarian apologists
fall wildly short of providing any convincing explanation for what
what went wrong with Weisberg’s analysis or lack thereof.
above actions all helped cause the current financial crisis. These
are not “theories,” they are truths. One would hope a “journalist”
and I use that term lightly would understand the difference between
theories and truth.
are no “libertarian apologists.” Libertarians understand government
intervention and our mercantile economy are fully to blame for the
current financial crisis.
“explanation” of what went wrong was just summarized above but apparently
Weisberg does not believe it or does not want to believe it.
of the most unpardonable sins of the entire article. Weisberg writes,
“We have narrowly avoided a global depression and are mercifully
pointed toward merely the worst recession in a long while. This
is thanks to an economic meltdown made possible by libertarian ideas.”
meltdown was made possible by endless government intervention, fractional
reserve banking, fiat money, government control of money and monetary
policy, and our modern day mercantile economy.
his uninformed indictment of what he calls libertarian economic
philosophy, which he fails to realize is really mercantilism not
a true free market economy supported by libertarians.
forensic work has to put the libertarian theory of self-regulating
financial markets at the scene of the crime, ” Weisberg states with
a presumably straight face.
Uh, earth to
Jacob, any competent journalist has to put government intervention
and the mercantile economic system still alive and not-so-well in
modern American at the scene of the crime!
so many liberal statist apologists whole-heartedly believes markets
filled with traders, business people, entrepreneurs, brokers, and
others in the private arena are evil and must be regulated by government.
The only lack
of regulation that exists today is a lack of regulation on government
itself. Government will never restrain itself. Leviathan’s only
goal is to expand its power, influence, and profit through force,
taxation, and war.
fails to correctly explain the economic philosophies, private and
public, of Alan Greenspan, Phil Gramm, and Christopher Cox.
claims “these men took the hands-off positions they did because
of their political philosophy, which holds that markets are always
right and governments always wrong to interfere.”
not be more wrong. These men did not take a hands-off philosophy.
In fact they are the ultimate meddlers in the free market!
the money supply in an orgy of government intervention while simultaneously
driving interest rates below what the free market had determined
were prudent and sustainable. Gramm, the former chairman of the
Senate Banking Committee make sure government worked closely with
special interests to keep the whole scam going, while Christopher
Cox, chairman of the SEC, made himself busy by meddling in other
aspects of the market.
George Soros who called the market’s right to buy and sell “market
fundamentalism.” Congrats to Soros on grasping the true nature of
capitalism built upon private property and the right to buy and
sell in voluntary transactions. Weisberg uses the quote to indict
what he thinks is a true free market but in reality is a mercantile
sin committed by Weisberg, his explanation of libertarianism. He
writes, “The best thing you can say about libertarians is that,
because their views derive from abstract theory, they tend to be
principled and rigorous in their logic. Those outside the government
at places like the CATO Institute and Reason magazine are just as
consistent in their opposition to government bailouts as to the
kind of regulation that might have prevented on from being necessary.
Let failed banks fail is the purist line. This approach would deliver
a wonderful lesson in personal responsibility, creating thousands
of new jobs in the soup kitchen and food pantry industry.”
and more wrong!
political philosophy does not derive from abstract theory. It derives
from common sense about private property rights, sound banking,
sound money, and no government intervention.
continues his wrong-headed “analysis” and “explanation” of libertarianism.
“The worst thing you can say about libertarians is that they are
intellectually immature, frozen in the worldview many of them absorbed
from Ayn Rand. Like other ideologues, libertarians react to the
world by failing to confirm to their model by asking where the world
went wrong. Their heroic view of capitalism makes it difficult for
them to accept that markets can be irrational, misunderstand risk,
and misallocate resources or that financial systems without vigorous
government oversight constitute a recipe for disaster. They are
bankrupt, and this time, there will be no bail out.”
absolutely no idea what libertarianism is or he willingly misrepresents
despite Weisberg’s assertion, are intellectually mature espousing
a worldview based on liberty, private property, and true free markets.
The mainstream media exemplified by Weisberg has cornered the market
on intellectual immaturity with their failure to understand Austrian
economics and to accurately describe and explain libertarian political
half of the argument correct, markets can be irrational, misunderstand
risk, and misallocate resources but ONLY when they are encouraged,
prompted, prodded, and forced by government decree, government programs,
and government force.
media is intellectually, morally, and ethically bankrupt and Weisberg’s
entire “argument” is filled with lies, misunderstandings, fabrications,
twists, turns, ignorance, and arrogance.
issue an apology for misstating, misunderstanding, and mischaracterizing
the causes of the financial crisis, libertarian political philosophy,
and economic theory.
The only lament
libertarians have is that far too many of the mainstream media,
political establishment, and everyday Americans have no clue about
libertarians, Austrian economic theory, or the principles of liberty.
And that has
to change in order for the country to return to its roots of true
free markets, Constitutionally-protected civil liberties, peace,
David Ward [send him mail]
is a disillusioned former member of the print and broadcast “mainstream”
media and now a professional stand-up comedian, philosopher, thinker,
actor, and writer from Ballston Spa, NY. Visit his