Freedom Fetterers: The Story of a Bankrupt Philosophy

Uncle Ron and The Deregulators

Once upon a time, way back in the 1980s, some seemingly intelligent people (economics professors at the Chicago School of Economics, led by Milton Friedman, for instance) and some not particularly intelligent people (Ronald Reagan, for one) agreed something had to be done. Their nation was suffering under the chains of regulation and the tyranny of oversight and, like some sort of Charles Bronson-Chuck Norris deregulatory tag team, they were going to save it and they didn't care who got hurt in the process.

It seems that fifty years earlier, way way back in the 1930s, some socialists with funny sounding names like Keynes and Roosevelt had tried to fetter capitalism.

And, as everyone knows, to fetter capitalism is to fetter freedom. And to fetter freedom is to fetter the American way of life.

How exactly did these radicals do it, you ask? How did they go about fettering capitalism and the American people's pursuit of happiness? How did they introduce this sinister and foreign-sounding thing called government oversight?

Well, firstly, they convinced a whole lot of people that the collapse of the economic system and the ensuing Great Depression was proof that government regulation of the financial system was a good idea. They argued that Wall Street couldn't be trusted to do what was right for the country and they even went as far as to say that it was the government's duty to watch over the economy to prevent any similar economic catastrophes from ever happening again.

It was a clever argument and, like Mao with his little red book, they sold it well. But not everyone was fooled. Certainly not Reagan and his spiritual mentor Uncle Milt. They immediately saw it for what it was: nothing more than a scam to stop really rich people from getting really really rich.

Dawn of A New Era

Well, by the 1980s all this regulation was driving the very rich absolutely nuts. So you can imagine their delight when this heroic Reagan figure came to power, riding out of the west shouting "Screw all that socialist shit!" as he set about returning the country to the happy, carefree, laissez faire days of the nineteenth century.

And so the era of Deregulation arrived (with the help of quite a few right-wing Democrats) and the very rich rejoiced. Milton Friedman was even awarded the Nobel Prize for Economics for his theories. It all seemed like such a no-brainer. "Government's not the solution, government's the problem", they shouted. "Let's deregulate EVERYTHING!" And so they did.

Oh sure, there were a few hiccups along the way, such as the Savings and Loan Crisis of the late-1980s and early-1990s, which eventually cost the American taxpayers one hundred and twenty-five billion dollars. But the Deregulators and all those who worshipped in the Church of Reaganomics told us that that was nothing more than a strange anomaly.

"Who needs oversight when you can have freedom?" they reminded us.

And so the Deregulators got back to work slashing and burning all forms of oversight... and it was good.

Chief among this lot was a Senator named John McCain, who, with all his years of experience, knew a good idea when he saw one. In fact, he'd eventually rack up over 25 years in Congress as one of the most vocal proponents of Deregulation American politics had ever seen.

Reagan did a superb job, of course, but, truth be told, he barely got anything done back in the eighties. It wasn't really until the Republicans regained control of both houses of Congress in 1994 that the real slashing began.

And then, after George W. Bush took the White House in 2000, all bets were off as 8 glorious years of unfettered, unabated regulatory eradication took Washington and Wall Street by storm. And, man, was it ever a great party!

"It's all for the benefit of the consumer and the taxpayer", they cried. "Nothing beats unbridled capitalism when it comes to lifting a country up where it belongs".

Well, by the time 2007-08 rolled around the nation had itself a financial system unregulated beyond even Uncle Ron's wildest dreams. Joy, prosperity and freedom had all been fully restored and America was once again a great, grand and glorious nation.

Oops...

But then something funny happened.

As the proponents of government regulation and oversight had predicted all along, this unregulated paradise completely fell apart. Huge banks started failing, mortgage giants Freddie Mac and Fannie Mae both went bankrupt and needed to be nationalized, many families lost their homes and/or much of their life savings, the whole financial system froze up and the government was forced to pump hundreds of billions, if not trillions, into the system to save it.

Worst of all, for the followers of Uncles Ron and Milt, when all the digging and analyzing had been done and the truth had finally been discovered, it was, in fact, the great panacea of Deregulation that was found to be the root cause of everything.

Sure, it seems obvious now, banks and corporations, which exist solely to make a profit, will, when not overseen by regulators and regulations, eventually fuck everything up. But, hey, Uncles Ron and Milt (not to mention their number one disciple Johnny McCain) seemed so damn sure of themselves that they started to convince almost everyone else as well.

It's just too bad they can't be here to see the fruit of their grand endeavors.

But I'm sure that even if they were here today to see all the pain, chaos and destruction their ideological baby has caused (so far), they'd still be passionately singing, over and over again, their favorite old anti-regulation ditty, "Oversight Blues":

"Alive alive, oh
Alive alive, oh"
Crying "Shackles and chains, alive alive-o"

I guess, like Kim Jong Mentally-il over there in North Korea, some people simply can't admit when their ideology sucks. Not even when it sucks so bad it's destroying an entire nation.

Mike Cowie (Oredakedo)
Friday, October 3rd, 2008

 

 

 

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Truth Discovered

With LESS THAN A MONTH of digging and analyzing was the truth really found? The root cause of everything is an enormous claim. In the extensive digging and analyzing process did you think to survey a little economic piece we call "The Federal Reserve". How about their regulation of the interest rate and the money supply? Might that not have any effect? All this deregulation that you blame is not actually deregulation when "The Fed" regulates the major indicators of economic stability such as the inflationary rate and strength of our currency. HOW ABOUT YOU RANT ABOUT SOMETHING YOU ACTUALLY KNOW SOMETHING ABOUT.

You're absolutely right...

You're absolutely right, Reagan appointee Alan Greenspan - Chairman of the Fed for 20 years from 1987 to 2006 and a staunch supporter of both Reagan's and George W. Bush's right-wing economic policies (deregulation, tax cuts for the rich, etc.) - has much to answer for.

 

The man calls himself a "lifelong Libertarian Republican" - and Libertarian Republicans are largely responsible for getting us into this mess... well, them and their friends, the free-spending, massive-deficit-creating, somewhat-confused Republicans like Bush and Dick.

 

Economist Paul Krugman - winner of the Nobel Prize in Economics earlier today - sees Greenspan as one of the main villians in this whole fiasco. And many others also see Greenspan as being largely responsible for, at the very least, the housing bubble. And his support for deregulation has been very well documented.

 

There's no doubt about it, Greenspan is absolutely and inarguably a significant member of the group of Republican right-wingers who I wrote this piece about, even if I didn't name him.

 

Aside from my supposed ignorance, I'm not sure just what it is we disagree on.

Mike Cowie