Crises and Leviathans


Ross Douthat gets this right:

I'll gladly pay you Tuesday for a hamburger today.

For a week after Greece's fiscal meltdown began, all the talk was about the weakness of the European Union, the folly of its too-rapid expansion, and the failure of the Continent's governing class to anticipate the crisis.

But then the E.U. acted, bailing out Greece to the tune of nearly a trillion dollars, and dictating economic terms to Athens that resemble "the kind of thing a surrendering field marshal signs in a railway car in the forest at the end of a bloody war," in the words of the Washington Post columnist Anne Applebaum. If the bailout succeeds, the E.U.'s authority over its member states will be dramatically enhanced—and a crisis created by hasty, elite-driven integration will have led, inexorably, to further integration and a more powerful elite.

This trajectory should be familiar to Americans. The panic of 2008 happened, in part, because the public interest had become too intertwined with private interests for the latter to be allowed to fail. But everything we did to halt the panic, and all the legislation we've passed, has only strengthened the symbiosis.

From the Troubled Asset Relief Program to the stimulus bill, from the auto bailout to health care reform, we've created a vast new array of public-private partnerships—empowering insiders at the expense of outsiders, large institutions at the expense of small ones, and Washington at the expense of state and local governments. Eighteen months after the financial crisis, the interests of our financiers, C.E.O.s, bureaucrats and politicians are yoked together as never before.

What we have, Douthat suggests, is "a system that only knows how to move in one direction. If consolidation creates a crisis, the answer is further consolidation. If economic centralization has unintended consequences, then you need political centralization to clean up the mess. If a government conspicuously fails to prevent a terrorist attack or a real estate bubble, then obviously it needs to be given more powers to prevent the next one, or the one after that."

NEXT: Tony Williams is a Pro School Choice, Low Tax Democrat...

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  1. That actually makes pretty good sense when you think about it.


    1. Really? Really? You anonytwat.

  2. If it were ever realized–a big fucking if–would Libertopia have any unintended consequences? Would Reason write about them?

    1. One premise of libertarianism is the incapacity of anyone to predict all of the consequences of any given decision. Limiting the size of the decision by resisting the centralization of power, also limits the size and scope of the unintended consequences.

      So, in answer to your questions, yes and maybe.

      1. America’s salvation has been that its self-assured utopians have been fuckwits who couldn’t organize kunch. Thanks.

        1. So, Max, the only path to salvation is shitloads of government. Right?

          1. Anyone notice that the closer we get to November, the more the lefties troll here? It must be a sign of frustration and panic.

          2. Of course it is, because that’s the only way to ensure progress without ever having to worry about unintended consequences. All those geniuses in government know how to plan these things to a gnat’ ass.

        2. F+


          To be really effective at trolling, especially in a threaded comment, you have to at least pretend to be engaging in the conversation. I mean, you’re free to throw out non sequitors and unrelated strawmen, especially at the top of a thread, but if you’re replying to someone, especially someone replying to you. you need to do it as an indignant response to something that was said front of you. It’s pretty clear that you’re fond of your clever “fuckwits couldn’t organize lunch” line, but it’s also clear that you were really really eager to use the line, as evidences by the typo, and you jumped the gun. Even quoting Corduroy’s response in italic would have gotten you where you needed to be, but your comment was something like a Tourette’s outburst, and it turns out to be not that effective.

          Go back and try again, Max, and this time think, “Quality Troll!”

          ps – I did give you extra credit for the passion, so you got that going for you. Good luck!

          1. To be really effective at trolling, especially in a threaded comment, you have to at least pretend to be engaging in the conversation

            I gather you haven’t met Max/Edward/Lefiti before.

    2. Although, in theory, I think Libertopia would be better than our current system, there would, of course, be downsides. The free market can be very cruel at times and it would require constant vigilance on the part of each individual. It would be a quite different way of living than that which we are currently accustomed.

      Everyone would always have to be ready for a downturn (both local and global) which would mean having a lot more in savings, a lot less in debt, and always living leaner than your means. ** Accompanying that is the fact that a constant readiness to re-educate yourself for a new vocation would be a must.

      Along with this, of course, it would have to be understood that those who didn’t live this way, would have to be left to flounder during bad times with only the charity of others to get them by (and charity could be rare…see above about living lean). That is, a bit of social darwinism would have to exist. This is the entire rub of pure Libertarianism (particularly when it comes to children of bad parents). I’d also point out that once you have kids, it’s much more difficult to be vigilant and ready for re-educating yourself (particularly if you’re a good parent). This is the major reason that pure Libertopia can’t exist, IMO, once society reaches a threshold level of affluence. There will always have to be a welfare state of some degree. The fight is to make sure that that degree is only as large as necessary and not a bit larger.

      ** Of course “leaner” is relative. After a few decades of Libertopia, it may end up that society has become so wealthy that the average lean living Libertopian is still living better than the current U.S. system could provide (which is already pretty affluent by most standards).

  3. If the bailout succeeds,

    Its already failed.

    This wasn’t a Greek bailout; it was a Euro defense bailout. And the Euro has been tanking.

    If it were ever realized–a big fucking if–would Libertopia have any unintended consequences?

    Of course. Everything does. The fantasy that decisions don’t have unintended consequences is pretty much confined to statist control freaks.

    1. The unintended consequences would all relate to the fact that entrenched interests would be much less secure. Without government intervention, big organizations become inefficient and obsolete and die. But with public private partnerships those organizations live on and their establishment leaders never suffer. That is what it is all about.

      1. “Without government intervention, big organizations become inefficient and obsolete and die.”

        That is a feature not an unintended consequence.

  4. “This trajectory should be familiar to Americans” because it’s exactly what Hamilton did in Washington’s administration – consolidating federal power over the states by assuming the latter’s about to default Revolutionary debts.

  5. I just entered a contest at the Democratic Senatorial Campaign Committee site. The prize is dinner with Obama and Barbara Boxer. (Wheee!) What should I ask?
    Here’s where to enter for free.

    1. One of my dreams in life is to get drunk and be kicked out of a Whitehouse state dinner. Whatever you ask, you would have to show up insanely drunk and have the evening end with you throwing up on one of them.

      1. Thanks, John. You have just given me a new dream.

    2. Yeah, but second prize is two dinners with Obama and Babs Boxer.

    3. What should I ask?

      Are you serious?

  6. What should I ask?

    “Would you hold these wires for me for a minute? I have to go over there and plug this lamp in.”

    1. I bet Boxer, at least, would totally go for it.

      1. I think you mean Senator Boxer, you inconsiderate asshole.

  7. Wimpy’s metabolism finally slowed down, I see.

  8. If a government conspicuously fails to prevent a terrorist attack or a real estate bubble

    ummm not so sure this works. It is governments job to defend against foreign enemies.

    Of course the Ron Paul argument is that past “defenses” caused blow back. Which is a compelling argument….but still entirely unnecessary for an article about financial systems.

    1. an article about financial systems.

      He has a paragraph or two in there about homeland security, actually. But I had quoted enough already.

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