Adumbration

The local cable system continues to show the 2009 Michael Moore film "Capitalism: A Love Story", on the "Current" channel, no less, a media outlet which name makes some claim to documentary status. 

But it is a weak documentary that looks at symptoms, and not to dig a little deeper to understand or depict the political circumstances and history that lead to our current situation. 

For all their vaunted goals, regulations protect those that already have economic power at the expense of their potential competitors and everyone else who would benefit from that competition; for examples refer to the extensive literature on regulatory capture and public choice economics (more explanation and examples here and here and here).  In A History of Money and Banking in the United States, Murray Rothbard gives many examples from finance and industries with interests in finance (i.e. almost all of them).  The problem with regulation is true in medicine and farming and steel production and automobiles and barbers and taxi drivers and liquor salesmen and finance.  The methods are tariffs that increase consumer prices, price supports that subsidize some typically established and moribund producers and penalize upstarts (and increase consumer prices), regulations that grandfather the established businesses and professionals and protect consumers from the lower prices or better service offered by newer competitors.

Promoters wrap their protectionist arguments in terms of saving jobs (e.g. very specific jobs such as those of particular automobile workers, or investment bankers who stand to benefit), and ignore the lost opportunities of everyone else who pay for those special benefits.  Lost opportunities accruing from higher prices, limited opportunities, and fewer alternatives.  How many times have you heard some politico endorse one project or another on that basis - "it will create a godzillion jobs, real jobs, high paying jobs, ..." - what's really happening is that everyone else is diminished to pay for those jobs, and the whole society is diminished for the priorities and values that we would otherwise support through spending and investment.

And why does this go on?   because the cost to us individually is pennies for each specific case, while the beneficiaries have huge payouts and the corresponding motive to lobby their case in Washington.  If it is human nature to be greedy, to want privilege, what makes it sensible to expect that the regulation we call for is not subverted for those with the political power?

Twenty five years of bailouts can't be wrong.    Oh, wait, maybe the can be after all.

My prediction of worsening economy is high inflation, interest rates rising, and investment stagnating.  Bush and Obama will be long gone from the scene;  instead, people will blame labor for wanting higher wages, business for wanting higher prices, and fail to realize the dollars themselves are losing value, even as the government continues to print more to pay for the latest shovel-ready projects.  Then we'll continue to blame the free market for the mess.

Capitalism?  what we have now is a corporate welfare and warfare state.  The D's and R's both share the blame.  The solution, if there is one, is limited government, government that applies strictly limited rules in an even way, with as local control as possible.

NOTES:

• In checking the links for this entry I discovered that Current was founded in large part by Al Gore, famous for political interests as Senator, VP under Clinton, and active speaking engagement schedule in the years since, and Democratic politician and attorney Joel Hyatt.
• Since it has been announced that the assets of Current TV have been sold to Al Jazeera America, I will copy the station's "About" content into the comments to this post