Ed Driscoll

'State Capitalism' Versus the Real Thing

I was going to add this Michael Barone article to the previous post on Wall Street, but it’s worth a separate entry, I think:

Across the Atlantic, Marc De Vos, director of the Itinera Institute, a Brussels think tank, advances similar arguments in his book “After the Meltdown.” The financial crisis, he argues, has brought a revival of “state capitalism,” in which governments “have an increased and distorting role in economics.”

“The state should be the partner of the market, not the owner or manipulator of the market,” he writes. “Governments should not pick economic winners and losers. The state may be back, but the politicians should be modest.”

Modesty, unfortunately, is not the dominant character trait of a president who predicted that his election would be seen as “the moment when the rise of the oceans began to slow and our planet began to heal.”

But facts are stubborn things. The fact that the private sector economy has not responded as administration economists expected and confidently predicted should be a wake-up call.

It shows the limits of expert knowledge and the ability of political actors to make optimal economic choices. [See also: the entire 20th century — Ed]

The intellectual firepower of this administration may be high. But so was the intellectual firepower of the postwar British Labour governments that nationalized steel, auto companies and the railroads.

As I’ve written before, for a guy who evidently really, really seems to dislike the British quite a bit, the America that President Obama wants to build looks a lot like pre-Thatcher England, circa 1977 or so.

And speaking of government distortions of the marketplace, Ace takes a look at “The ‘Neutral Story Line’ and How The Media Uses It To Justify Its Perpetual Game of ‘Guess That Party!'” Ace focuses the legacy media’s deliberately sloppy and biased reporting of the insane high six-figure salaries of the public employees of Bell, CA (pop. 38,000), the poster child for “The Golden State’s War on Itself,” as Joel Kotkin writes in the latest edition of City Journal.

Related: If only because I’ve been meaning to link to this for a while, “The most important chart on the Obama budget?”

Related: More MSM fun from Bell, CA:  “Coulter: One in 300 News Stories Mention Corrupt Government Bureaucrat a Democrat.”