Rationalizing the Irrational

Email Print
FacebookTwitterShare

It is interesting watching members of Congress, the media, and various government officials stumbling all over one another in an effort to justify the bailout of Bear Stearns – and, by implication, any other investment firms that may later face bankruptcy. Most Americans are so conscious of maintaining “security” in all facets of their lives that they are willing to sacrifice their liberty and the market system that produced the corporate systems they now seek to preserve. Few see the healthy, disciplinary value of allowing firms that have lost their creativity and resiliency to go under; to free up present capital for reinvestment in more promising lines; to understand that the only real security lies in the willingness to make changes in a constantly changing world. The political/media/academic babblers who continue their efforts to rationalize the economically irrational amaze me. CNN interviewed one man – Peter Schiff – who provided a solid analysis of what has caused these current problems, and how existing policies are only going to exacerbate the difficulties. The CNN interviewer could only say “that’s not true” to some of Schiff’s explanations, avoiding the analytical confrontation that is always needed, but particularly in today’s economy.

I am reminded of Rothbard’s classic line about how ignorance of economics is not, in itself, to be condemned, but that those who are ignorant of such principles ought not to be proposing remedies for economic problems. How many of these characters make their personal investment decisions on the same basis they urge the federal government to act? Listening to hack politicians, journalism-major-newscasters, and crystal-ball-gazing academicians address the impending economic collapse – all the while sanitizing the condition as merely a “decline” – conjures up the metaphor of a troop of chimpanzees performing brain surgery, all with the same prognosis for the patient.

11:27 am on April 3, 2008