Lynne Kiesling recently wrote a great overview of the elegant complexity and beauty of self organizing free markets. Read it here.
Tag Archives: rule of law
The Providence Journal reports that Rhode Island Tea Party was permanently banned from participating in the oldest Independence Day parade in the nation for the heinous crime of handing out free copies of the US Constitution.
A quick check of the parade rules doesn’t make it evident that handing out free copies of the US Constitution would be grounds for permanent barring from the parade. (at least they didn’t when this was posted). Perhaps those rules will be quickly changed when the press gets a hold of this story.
I wonder what it is those folks on the parade committee think they are celebrating with all their flag waving. Someone on the Bristol parade committee should perhaps read one of those copies of the Constitution that upset them so much. I’d suggest they pay particular attention to the First Amendment.
At least this story is getting coverage in the popular press, unlike the trampling of the Constitution that seems to be an increasingly preferred means of expediting politicians favored outcomes in Washington these days.
A very clear explanation of how the government shenanigans in the bank and auto company bailouts is undermining our economy and the rule of law is provided in Peter Schiff’s short article “Property Rights Takes a Hit”, quoted at Nathan’s Economic Edge.
Schiff opens with: “Crony capitalism is a term often applied to foreign nations where government interference circumvents market forces. The practice is widely associated with tin-pot dictators and second-rate economies. In such a system, support for the ruling regime is the best and only path to economic success. Who you know supersedes what you know, and favoritism trumps the rule of law. Unfortunately, this week’s events demonstrate that the phrase now more aptly describes our own country.”
He goes on to predict that the blatant disregard for the rule of law involved in recent govenment economic interventions will inevitably undermine capital investment and turn the US assets and capital markets into risky bets with valuations responding accordingly.
When the Supreme Court chose to allow the White House to undermine well established contract and bankruptcy law and give massive handouts to Autoworker’s union at the expense of the investments made by the pension funds for Teacher’s and Fireman’s unions, it became clear that we are well on our way down a very slippery slope. The irony of a decision to steal from one union in order to offer unprecedented handouts to another makes one wonder how such choices will be balanced and made once the fundamental decision to simply ignore the law and violate the constitutional protection of property rights has been reached.
Edward Glaeser at Harvard argues eloquently for a return to more prudent economic policy. He starts by suggesting:
“In the 1990s, American economists roamed the world preaching the virtues of fiscal restraint, the rule of law, free trade, and privatization. Today, those four policy pillars, once known as the Washington Consensus, are abandoned in the city that gave that consensus its name.”
Of critical importance, which the current Washington insiders don’t seem to realize, he suggest that:
“Few variables are as reliably correlated with economic growth as respect for private property. America’s economic strength reflects, in part, the fact that investors have historically found this a legally reliable place. That reputation is a golden goose, and destroying it would be like adding trillions to the debt.”
And he concludes:
“For our children to face this debt, they will need free trade, private ownership, and respect for private property. Eliminating fiscal restraint during a recession is understandable. Eliminating all four pillars of sound economic policy imposes too much of a cost on tomorrow for too little benefit today”.
In this age when more government seems to be seen as the answer to all questions, it is sometimes hard to remember how very recently we learned the lessons of the failed 20th century socialist experiments. And indeed, the corrupt corporate socialism of the Bush era was a primary factor causing the mess we are in today.