Capital Markets

New Republic's Half Full Glass Dumped On Their Heads. Again.

|

Ah, New Republic. Life holds so many shocking disappointments for you. Like today, when you figured out that the bailout wasn't going to be a smooth transition to economic health guided by a selfless, rational public servant. Clay Risen writes:

At this point it's hard even for supporters of the original bailout plan, like myself, to keep faith in Hank Paulson and the Treasury.

Is it too much to ask that a high-ranking government official who has been given essentially unlimited power by Congressional action to do what he wants should have to justify his motives?:

What's wrong with buying troubled assets, and why is it better to buy stock directly? Why bailout AIG but not GM? There are perfectly persuasive answers, even obvious ones, but Paulson has yet to float any of them. He simply says, haughtily, "I will never apologize for changing the approach and the strategy when the facts change." 

Lost faith in a hugely ambitious project about which you were recently optimistic? How sad. Worst of all, this plight is so darn familiar. It almost feels like this has happened before.

NEXT: Reason Talkers Around Town: Nick Gillespie on "The Libertarian Dime"

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. One of the worst things is this is not going to stop them from supporting basically the same policy in a slightly different form in the near future. “Oh, but this is different!”

  2. One of the worst things is this is not going to stop them from supporting basically the same policy in a slightly different form in the near future. “Oh, but this is different!”

    It will be different. The right people will be in charge.

  3. How often do people claim to have found “The Plan” that will solve a particular problem by government intervention, and then only later see the unintended consequences?

    I will give the New Republic some credit, however: unlike most who simply shrug off the truth of plans that go awry, at least Clay Risen admitted to being wrong on this one.

    Sort of.

  4. Obama will make Libertarians out of them yet.

  5. Yes, not having the absolute truth is the kind of downer that libertarians never have to cope with. In the real world, projects aren’t perfect. The real world sucks.

  6. So many things go right over trolls’ heads, I must admit possessing a sick fascination as to what their hair looks like.

  7. Yes, the left is so in touch with reality and so pragmatic.

  8. Gotta break a few eggs to make and omlet in this messy world, right Lefiti?

  9. In a related note, Bush says finacial crisis “is not a failure of the free market system.” Just what we need: GWB singing the praises of free markets after he gives us “the bailout.”

  10. Gabe wrote:
    Gotta break a few eggs to make and omlet in this messy world, right Lefiti?

    Don’t forget about the $xxx bn. Department of Omlets that makes it all possible in the world of the Left.

  11. So you supported the original bail out? I was raised to believe America was a free market society and you live or die on your own merits.

  12. libertarians told them no to do it,

    “It’s better than nothing” they said.
    “bipartisian support is what is in order or else we’ll all be dead”

    When more people figured out it was a license to steal,
    trillions had already been stolen, it was a done deal

    Lefitis shrill voice still did squeal,

    “You libtardarians just don’t understand,
    It would have worked fine with a slightly more well thought out plan”

  13. Lefiti | November 13, 2008, 3:01pm | #
    Yes, not having the absolute truth is the kind of downer that libertarians never have to cope with. In the real world, projects aren’t perfect. The real world sucks.

    Which is why the invisible hand of the market works much better than the iron fist of authority in the real world.

  14. I was raised to believe America was a free market society and you live or die on your own merits.

    I’ll bet you still believe in santa Clause. Moron.

  15. Yes, the left is so in touch with reality and so pragmatic.

    The old commie left wasn’t pragmatic. It’s actually the model for you dogmatic right-wing nutjobs, although you’ve never managed to get a fraction of communism’s following.

  16. Lefiti: It’s precisely because the real world, and the real people in it, are imperfect, that limitations on government power are necessary. In a free market, power is distributed to the individuals most directly affected by their decisions. Your universe is based on the assumption that public servants will act in the public interest rather than their own. Markets are based on the assumption that people will act in their own interest. It’s a far more realistic creed.

  17. it really should be Santo Claus, shouldn’t it? since he’s got dude parts and all.

  18. or just San Claus, i guess

  19. Guess I’ll have to do it for you, Lefiti:

    The left was in touch and pragmatic,
    The commies were more automatic
    But libodork nut-jobs
    Are blathering tard-slobs
    And super wing-nutty dogmatic.

    Trollery I can get behind!

  20. People are evil, people are evil, we must’nt live in a Hobbesian world.

    We need a bigger government to protect us like a innocent little girl.

    But where o where will we find the angels needed to look over the evil masses?

    the people are heavenly, the people are heavenly,

    we can trust the leader they select will lead us to flowers and molasses

  21. Hot damn. Katherine Mangu-Ward actually said something that could be construed as a criticism of a member of Team Red.

  22. I don’t believe in Santa Claus, and I don’t believe our children and grand children should be paying for the debt to bail out greedy people. So I’m thinking the people of this country are the morons for giving our government a blank check.

  23. “I will never apologize for changing the approach and the strategy when the facts change.”

    Okay. I can buy that. But how about telling us which facts, exactly, you think have changed?

  24. thanks for your guidance citizen nothing.
    I used to write trollery while huffing and puffing,

    Now I write with style,
    hit “submit comment” with a smile,

    and have no bitter flame wars worth discussing

  25. “…guided by a selfless, rational public servant.”

    Ha!

    Talk about believing in Santa Claus, the notion that such people actually exist is right up there with it.

  26. “In a free market, power is distributed to the individuals most directly affected by their decisions.”

    And what about negative externalities?

    “Markets are based on the assumption that people will act in their own interest.”

    True. But also that people are rational actors with full information. Please point me to where this exists.

  27. So then, lupan, are government officials rational actors with full information? Point me to where this is so.

  28. first guy said:
    “Markets are based on the assumption that people will act in their own interest.”

    lupan sansei said:
    “True. But also that people are rational actors with full information. Please point me to where this exists.”

    lupan is right, if you can’t prove all of these things then it is obvious that the only moral couse of action is for some group with a monopoly of force come in and make people transact according to the will of a altruistic central planner.

    only a nut case would disagree.

  29. what about the “negative externalities” of taking property rights away from individuals and giving them to a thirds party?

    does anyone care about those lupan?…or does it explode your brain to admit they exist?

  30. SugarFree | November 13, 2008, 3:04pm | #
    So many things go right over trolls’ heads, I must admit possessing a sick fascination as to what their hair looks like.

    Not the first time that idiot has made the same argument that Hayek made against the econometricist nearly a century ago without knowing the original source for it. He probably thinks the ‘Forgotten Man’ idea began with Biden, or if he is a typical half educated liberal nitwit, FDR.

  31. “So then, lupan, are government officials rational actors with full information? Point me to where this is so.”

    “lupan is right, if you can’t prove all of these things then it is obvious that the only moral couse of action is for some group with a monopoly of force come in and make people transact according to the will of a altruistic central planner.”

    Who are you two arguing with? Please point out where I said anything in support of either “all knowing” govt officials or coercive actions by an altruistic central planner.

  32. It will be different. The right same people will be in charge.

    Anybody want to give me odds on Paulsen hanging on in the Obama administration?

    Geithner as Treasury Secretary would be the “same” as well.

  33. lefiti,

    In the real world, projects aren’t perfect. The real world sucks.

    Actually, this is part of the backbone of libertarianism, and it is one the main reasons why libertarians have significant problems with concentrations of power and one size fits all solutions. Government interventionism always, always comes with those two qualities.

    In other words, government intervention is generally speaking the quintessential example of putting all your eggs in one basket approach.

  34. “what about the “negative externalities” of taking property rights away from individuals and giving them to a thirds party?

    does anyone care about those lupan?…or does it explode your brain to admit they exist?”

    Again, point me to where I supported taking property rights away from individuals and giving them to a third party? Jeebus, do you guys read the comments or just interpret them as you see fit??

  35. “Markets are based on the assumption that people will act in their own interest.”

    True. But also that people are rational actors with full information. Please point me to where this exists.

    Neither condition is necessary from an Austrian standpoint.

  36. lupan sensei,

    And what about negative externalities?

    Of government intervention? They are legion.

  37. “Jeebus, do you guys read the comments or just interpret them as you see fit??”

    Hey! I can play this game, too!

    “Please point out where I said anything in support of … “all knowing” govt officials”

    Please point out where I said anything about you saying anything about “all knowing” govt. officials.

    This is fun!

  38. And what about negative externalities?

    What about them? And, for that matter, what about positive externalities?

    All actions have externalities, including government action. To the government, though, damn near everything is an externality.

    True. But also that people are rational actors with full information. Please point me to where this exists.

    Certainly not in the government. A good case can be made that government actors have less access to good information, because (1) any information that is given to a person in a position of power is filtered and (2) government tends consist of heavily layered bureaucracies, each layer of which further filters and distorts information.

  39. Markets don’t assume that participants have perfect knowledge — they work in spite of the imperfect knowledge of the individual participants. They harness and combine the imperfect knowledge of thousands or millions of individuals into a whole body of knowledge that is more complete than the sum of its parts (albeit not necessarily accessible in coherent form by any individual). But central planning — to work as intended — demands that knowledge of the planners be as complete and perfect as possible. Because the attainment of this ideal always falls way short of the mark, so do the policies and programs enacted by the central planners. This is, I think, one reason why central planners soon attempt to create mechanisms that imitate or seek to “harness” market forces as one might a wild horse. They realize at some level that a functioning market can do most of the work for them, and they can come along for the ride and prosper. But then they presume to steer the horse, and when they steer it in ways it clearly does not want to go, and it bucks them off, they say the mount is at fault, not the parasitic riders.

  40. A rational actor does not need full information, BTW.

  41. my sincere apologies lupan we must have not understood what you were trying to get at.

    I will answer your questions without reading into what I thought your were trying to point out.

    “And what about negative externalities?”

    the negative externalities of governemnt action uare usually worse than the negative externalities of individual action(i.e. free markets)

    “But also that people are rational actors with full information. Please point me to where this exists.”

    I can’t. What are the consequences of not being able to point out people with full information?

  42. Markets are based on the assumption that people will act in their own interest.

    True. But also that people are rational actors with full information. Please point me to where this exists.

    Not true, actually. The theory of effecient markets assumes people are rational actors with access to full information. That’s why it’s just a theory — it doesn’t exist. It can help for modeling purposes, however, a la the way scientists assume zero gravity. Results from these models can then be used to help craft utilitarian policies.

    All of which ignores why most libertarians support free markets. Hint: It has less to do with utility than you think.

  43. Good gravy! Sensitive much? I see that there seems to be some miscommunication going on here. I never said in my previous posts that I think govt actions don’t have negative externalities by their actions, or that I even supported govt intervention in most cases. I merely asked Hazel Meade if negative externalities were distributed to the individuals mostly affected by their decisions, as she stated power is, in a free market. I also never stated that govt actors are rational nor have full information, I merely expanded upon Ms. Meade’s statement that markets assume people act in their own interest. That is true, but that theory (rational choice) is incomplete in that form. That theory also assumes that those individuals are rational and have perfect information, making her original premise true (as I stated), but based upon unreleastic assumptions that aren’t found in the real world.

  44. Guys, I told you: Don’t feed the f***ing troll! It just keeps coming back.

  45. Can someone explain why the government will give money to GM instead of just buying a shitload of cars from them?

  46. “I see that there seems to be some miscommunication going on here.”

    Your local community college could probably offer some help with that, lupan.

    (Sorry, e. Sometimes I can’t help myself.)

  47. Howabout the gov buys all of GM inventory, and gives the cars to illegal immigrants to drive themselves home? (some may need to ship them)

    GM survives, illegals leave (i think they should stay but whatever), and the car market here doesn’t become flooded causing prices to stay at the same point.

    if only we could ship these extra houses as well…

  48. Can someone explain why the government will give money to GM instead of just buying a shitload of cars from them?

    This whole thing is about doling out welfare to the UAW guys (active employees and retired pensioners) while maintaining the facade of helping the economy.

    If G.M. were a non-union company in a place like Memphis, Tennessee instead of a union company in Detroit, the libs wouldn’t give two craps if it disappeared tomorrow.

  49. Nah. Those illegals would all just end up crashing into LoneWacko.

  50. Is it just me, or does Lefiti seem to be straining to find something to snark at?

  51. “Hint: It has less to do with utility than you think.”

    Yeah.

    There is no need to “prove” that free markets create superior outcomes (as if there would ever be any agreement on what those happened to be).

    Free markets are the process by which individuals exercise their rights to freedom of contract and private property rights.

    And the maintainence and maximization of those rights is the outcome that is the proper objective of government – not attempting to engineer specific economic outcomes.

  52. CN,
    I figure LoneWacko will take pot shots at them as they leave.

  53. e.,
    describing lefiti’s contribution as “snark” seems too kind.

  54. yes, if they buy a shit load of cars then GM would have to produce stuff and that is expensive and a drag…they’d barely make any profit….when the government just gives them money they make 100% profit and can embezzle it straight into the bank accounts of executives and board members.

  55. New Republic turns out to be full of shit (again). Film at 11.

    -jcr

  56. It is best that the inventory sit in big parking lots and corrode into rusty crap…once the cars are destroyed they will stimulate demand for more cars. If anyone actually drives the cars the CO2 will poision the planet and golabal warming will accelerate as the ice caps are on the verge of disaappearing already.

  57. Free markets are the process by which individuals exercise their rights to freedom of contract and private property rights.

    And the maintainence and maximization of those rights is the outcome that is the proper objective of government – not attempting to engineer specific economic outcomes.

    Libertarianism isn’t utilitarian?
    Well that does it I’m voting for Obama!

  58. The New Republic scares me. It isn’t the naive ranting of a college student, or the know-it-all attitude of a college professor, or even the empty rhetoric of many leftist politicians.

    They are not misled, but often actively malicious. See “Angry White Man”, the hit piece they did on Ron Paul earlier this year, which even said that Murray Rothbard’s philosophy of anarcho-capitalism was a product the US Confederacy!

    When I first read the article, I thought it was a joke, but it is what they actually believe. Imagine a magazine run by clones of Lefiti. Except they aren’t trolls, they ACTUALLY BELIEVE WHAT THEY WRITE 100%.

    Fucking spooky, man.

  59. “the negative externalities of governemnt action uare usually worse than the negative externalities of individual action(i.e. free markets)”

    In aggregate, I agree. But I do have a question concerning the bailout and reactions I have seen on this site to its passage. First, disclosure–I am not 100% convinced that the bailout was needed, nor do I agree with all of it in its present form, but I would like to play Devil’s Advocate for a bit. Most contributors here seemed to vehemently oppose the bailout for various reasons, but my question is this. What remedy/answer, if any, does libertarianism (or just your belief; not looking for a purity test here) hold for those innocent bystanders who did nothing wrong, yet will feel the brunt of the negative externalities from the fallout of the Wall Street mess? (And please no alternative universe explanations of we would never have this situation in a libertopia) I’m talking of those people who did not participate in any of the incompetent decisions which resulted in where we are now, but still may lose their jobs, their homes, or whatever. Taking money from the taxpayers to bail out failing businesses is not in my top 100 choices for remedies but it may (and I repeat may) save some of these innocent third parties from feeling the negative effects from decisions they had no part. Yes, using taxpayer money for this is coercion, but isn’t opposing them a form of indirect coercion upon these parties? Aren’t they taxpayers as well? Is there a weighting test that of two coercions, the lesser is the better choice? I’m not trolling here, would like to hear your opinions.

    ” Your local community college could probably offer some help with that, lupan.

    (Sorry, e. Sometimes I can’t help myself.)”

    Well, when you graduate high school, maybe you should think of attending. Sorry, sometimes I can’t help myself either.

  60. lupan: The whole game is rigged and because of this you can’t ask us to find a way to solve this problem without hurting people who didn’t directly cause it. Still, I (we) feel that the only way to get a fairer game is to start today and that means no bailout. Continuing the game will just make shit worse for everyone, IMO.

    So no there is no libertarian panacea. But you are right, in libertopia this would not have happened.

  61. “In a free market, power is distributed to the individuals most directly affected by their decisions.”

    And what about negative externalities?

    That’s what courts are for. So the people that you directly affect with your decisions can take it up with you directly.

    Granted, in some cases, certain negative externalities are so widely recognized that we just create a law cause it’s easier to implement than a million court cases.

    “Markets are based on the assumption that people will act in their own interest.”

    True. But also that people are rational actors with full information. Please point me to where this exists.

    I’m just pointing out why markets are better than government control. Not why they are perfect systems for distributing resources fairly or something. They rely on the assumption that we WILL behave self-interestedly, not on the assumption that whoever we appoint won’t. Hence, more realistic.

  62. “What remedy/answer, if any, does libertarianism hold for those innocent bystanders who did nothing wrong?”

    I suspect that this question/implied view…is what caused many people to be kinda ok with the bailout…and while it is socialist …I can at least accept it as some weak argument for having some version of a bailout. ….I can accept that libertarians are outnumbered by socialist in this coutnry….however it is maddening to see a bunch of stupid socialist cooperate with bankers to rob the country blind AND fuck the “innocent bystanders” in the middle and lower classes. To me this is what was happening from the first rough draft of a “bailout”.

  63. lupan:
    There’s a problem with the feeling that people are entitled to jobs that they may lose. A job is NOT property. A job is a contractual arrangement between an individual and another person or group of people. You should always be prepared to deal with the fact that that relationship might end.

    Most people nowadays go through life with the feeling that they’re entitled to a job and a certain standard of living that goes with it. This is a major cultural problem that the welfare state has produced. It breeds this pervasive feeling of entitlement to all sorts of stuff that doesn’t grow on trees. So when the economy hits a slump everyone thinks that they are being deprived of something they have a right to.

    If the entire economy collapsed, they would sit on their asses and complain that the universe wasn’t being fair to them by depriving them of cushy jobs and free health care. We’ve infantilized the population.

  64. What remedy/answer, if any, does libertarianism (or just your belief; not looking for a purity test here) hold for those innocent bystanders who did nothing wrong, yet will feel the brunt of the negative externalities from the fallout of the Wall Street mess?

    Oh that’s simple, under a libertarian system, they won’t be further ripped off to pay for the losses suffered by the guys who made the bad decisions.

    Under a libertarian system, the production schedule is allowed to re-synchronize with the actual consumption schedule at the fastest possible rate so that people are once again gainfully and productively employed.

    All the government interventions do is rob those who did nothing wrong and give the money to people who made unwise decisions. They spread the damage around. They make the damage worse (the bad businesses keep executing their unwanted/unprofitable processes).

    And frankly, given that much of the problem was caused by people deciding that they no longer needed to think about prudence, the best long-term solution, or the least damaging one, is to teach people that they can depend on the Great White Father in Washington DC to swoop down and save them – that they need to look to their own affairs.

  65. “I’ll bet you still believe in santa Clause. Moron.”
    Lefiti

    Apparently 66 million voters for “the one” still do.

  66. You would think the people voting for the fat old white guy would be more inclined to believe in Santa Claus.

    Just an LOL. Nothing serious. I voted for Barr.

  67. What remedy/answer, if any

    Not much, if any. In case no one told you, life isn’t fair, and as often as not, good people suffer. If this is a problem for you, take it up with your creator.

  68. zoltan | November 13, 2008, 10:42pm | #
    You would think the people voting for the fat old white guy would be more inclined to believe in Santa Claus.

    Just an LOL. Nothing serious. I voted for Barr.

    So you voted for the fat, somewhat white guy over the medium build old white guy, and the skinny, somewhat black guy.

    I did too ’cause there ain’t no such thing as Kris Kringle.

  69. I said it on every other blog – might as well say it here.
    Did Hank Paulson know how Goldman Sachs made money???
    any answer is disturbing

  70. Hey, at least they didn’t call everyone who opposed the bailout an anti-semite.

    Baby steps, TNR. Baby steps.

Please to post comments

Comments are closed.