An audio version of this article, read by the author, is available as a free MP3 download.
In case you’ve ever wondered what it must have been like to read Pravda, reading the American media’s treatment of the financial crisis and our wise leaders’ expert management of it all has given everyone a wonderful opportunity. For instance, check out this piece from several days ago on Politico.
If you can’t bring yourself to click on the link, I’ll give you the headline: "Obama Would Regulate New ‘Bubbles.’"
Yes, you read that right. "Bubbles" just occur spontaneously. They have no cause or explanation. We need government to identify and destroy them.
Sometimes I wish our overlords would get their stories straight. First, Alan Greenspan — whom the New York Times once described, in its typical toadying, totalitarian fashion, as "the infallible maestro of our financial system" — told us it was impossible to tell if a bubble existed at any given time. Now we have Barack Obama insisting that not only can we detect bubbles, but we can also deflate them with sufficient dispatch to prevent them from causing any serious economic disturbances.
How are we peons to decide between the competing views of our infallible maestro on the one hand and the man who would be FDR on the other?
I shouldn’t be so cynical. It is not for us to question how our overlords intend to distinguish between genuine growth in some industry on the one hand and bubble conditions on the other. Just to be safe they may have to quash all rapid growth wherever it occurs. Perhaps they can cut off credit to an entire sector of the economy, or levy industry-specific taxation. (Anyone who thinks this type of discretion and micromanagement might be exercised with political motivations in mind, or for any purpose other than the common good, is almost surely a good candidate for surveillance in our progressive commonwealth.)
In their quest to free us from economic instability, our betters may find it necessary to institute new rules. It is our job to accept these new rules with docility and thanks. These rules might have to be kind of sweeping, perhaps on the order of nobody may do anything. In liberal times that could perhaps be modified to nobody may do anything without asking permission. True, we could then wind up with a lengthy debate about whether asking permission itself counted as doing something, such that we’d need to ask permission in order to ask permission, in an endless regress. We’d then be back to the original nobody may do anything, which is probably the safest place to be anyway.
Or perhaps our rulers could shut down the electrical grid from time to time. I’d like to see those greedy fat cats inflate a bubble without any electricity!
Now the possibility that the government itself could be the primary culprit in the generation of asset bubbles is of course not merely rejected; the very idea cannot even be entertained. The great progressive institutions of government and central banking the causes rather than the solutions to our problems? Impossible!