Jonah Goldberg writes, “It’s no wonder lovers of limited government and fetishists for free markets are moping like dogs whose food bowls have been moved”:
One of the great things about capitalism is that, unlike socialism or, say, Bobby Knight, it can deal with failure. In fact, capitalism needs failure. Joseph Schumpeter called this “creative destruction.” Your grandmother called it “making lemonade out of lemons.” The beauty of free markets is that firms learn from their mistakes or they lose money, shrink, and then go out of business. Governments, meanwhile, grow from their mistakes and learn to make money from them.
Under normal circumstances, the financial inferno would cause a lot of pain, but it would also burn away a lot of deadwood. The strongest firms would survive, and newer, healthier businesses would sprout from the ashes. Plummeting housing prices would make homes affordable for first-time buyers again, particularly those with good credit who live within their means.
Sure, we would still have a stimulus bill, with tax cuts and infrastructure spending and, yes, silly pork projects. And that would be fine. We would even have some kind of bailout of the banking industry, which became a mess in part because people like Christopher Dodd and Maxine Waters tried to play the banker in their own personal game of Monopoly.
But that’s not what we got. Instead, the old adage “Everyone’s a capitalist on the way up and a socialist on the way down” is kicking in. The thing is, if you’re a socialist on the way down, you were never really a capitalist on the way up. Capitalism requires putting your own capital at risk.
What we do have is a grand adhocracy where “government,” a.k.a. Barack Obama, Timothy Geithner, Nancy Pelosi, and a dozen others, will figure everything out as they go. Businesses will rise or fall based on their skill at kissing up to the government.
And as sure as shinola, when government fails again, we’ll be told that only government can save us.
Finally, in a post that shouldn’t come at all as a surprise to those of us who are fans of Jonah’s book, Michael Ledeen highlights Newsweek’s fear of dropping the F-Bomb on their recent cover story, which makes the reports of Nancy Pelosi’s next travel destination immediately after the “Stimulus” bill is voted on all the more ironic.