Things the Truly Addled Believe

You can find a pot of gold at the end of a rainbow. The fairies come out to dance by the light of a full moon. Free markets will discipline themselves without regulation.

The last two decades have shown that anyone who truly believes that free markets will discipline themselves needs to be thrown into a padded room. From the S&L crisis through the tech bubble, the deregulation of the California electricity market and the implosion of Enron, the housing bubble and now the "collateralized debt obligations" and subprime mortgage meltdowns, one one constant is that there is no market discipline at all when things seem to be going well. In one of those rising markets, where everyone seems to be making money hand over fist, there is no discipline. Everyone shifts into "Serious Greedhead Mode" and bets the farm on everything going up forever.

Which, of course, it never does. When the bubble pops, the speculators all turn to Unka Sam to save them from catastrophe. At least the S&L crisis sort of matched the end of the Cold War, but this time, the Bush-Greenspan Housing Bubble and Meltdown matches Bush's Wars and Bush's Huge-Ass Budget Deficits.

I don't understand why the conservatives believe that capitalists will behave in any way other than "hooray for me and fuck all y'all." In no other realm of human endeavor does a society let things run rampant. We don't "deregulate" the highway system and let people settle on whether or not they are going to drive on which side of the road and at what speeds. The quality of American food and medicines was abysmal before the passage of the Pure Food and Drug Act of 1906. We don't let people decide what laws they are going to obey. And anyone who has lived downstream or downwind of a factory in the old days can testify as to what life was like before pollution controls were mandated.

But the markets are supposed to regulate themselves? If this is what Bush and Paulson truly believe, then they are indeed either high or are truly addled.