Toles on Wall Street

As we've written here many times, including just now, we aren't reflexively anti-government. Our complaints about the nature and timing of some of the Fed/Treasury interventions of the last few months haven't been ideological; they've been pragmatic. Our view has been that asset re-pricing was long overdue and quite necessary for the long-term health of the financial markets and the world economy.

Given our perspective (we love market systems and incentives, but those systems need rules--and enforcers!--to function), we're always amused by free market absolutists who have convinced themselves that markets can exist (and more than exist, thrive) in some sort of state of nature without the heavy hand of the state. Then when the going gets tough, in part as a result of the absence of adequate rules or enforcement, they sag their way into the halls of power to ask for help to extricate themselves from this fine mess they've gotten themselves into.

As he so often does, Tom Toles captures all of this better than any rambling blog post ever could...

click to enlarge

Comments

[OldLimey:]

Good post.

I'm certainly no lawyer, but would it be fair to generalise that within the space of the last few days both the Constitution and the rule of law have been eviscerated in the US? This probably sounds a touch daft, but has there actually been a coup that nobody's noticed amongst the bedlam?

2008 Sep 19 11:18 AM

[gordon:]

This was engineered on Quad-Witching options expiration to achieve max pain on short-sellers, those who bet right on fundamentals, democracy and free markets be damned, UK says no short selling, period, but won't bailout autos, creditcard bonds, etc, only banks. Are autos, creditcards, student loan collateralizations included in Paulson's cash for toxic bonds? Is that next? The ECB discovered an Australian bank had re-routed toxic auto loans through a subsidary to disguise it as mortgages.

2008 Sep 19 01:00 PM

[rogerk2:]

Get real, guys. Nobody's paid any attention to the Constitution since the Great Depression. Real democracy went out with the advent of TV and the rise of big media thought control. The market has never been "free;" it's always been manipulated to enrich insiders at the expense of retail investors.

What we're seeing is a process of ownership change, transitioning ownership of the government from big oil to big finance. The problem is, control of big finance is being "outsourced" offshore to China, et al. They own so much of our debt, they can hold a gun to our heads.

I guess at least you're happier thinking there really is a "free market" out there somewhere.

2008 Sep 19 05:54 PM