Defeating Socialism, Defending Freedom: It's not the Free Market That Caused the Financial Crisis

The Left's uproar over the financial mess is fairly typical. It's the end of libertarianism, American inequality is the problem, and only the super-socialist Barack Obama can fix this mess.

Well, libertarianism isn't dead. It never really lived. As long as Peter can vote to take money from Paul, there will never be a libertarian economy. The most I can hope for is a mostly free-market. What the left-leaning fail to acknowledge (or understand, I am not sure which), is that the financial crisis that has been thus far averted is a product of government subsidy, not the free market's excesses. Bad loans were made at government direction. Fannie Mae and Freddie Mac, and the derivatives made possible by their drunken loaning, are the reasons for the credit freeze. In the real world, the most sub-prime of sub-prime loans would simply not be made. If you cannot afford to buy a house, rent. The rest of us cannot afford anything else. You do not have the right to a house - you have the right to pursue a house.

To my original point, the financial crisis is not just an American problem. The Europe Central Bank is being pressured by member states and other trade partners to coordinate a bailout in the amount of trillions. The United Kingdon has seized two massive banks. Germany has approved a plan that rivals the size of the American plan. By any standard, these are socialist economies all.

The idea that socialism prevents such crises is absurd. The red herring of inequality does not fly, either. Giving more money to people who cannot otherwise create it is pragmatically dumb and an invitation to systemic moral hazard. What the latter day and modern day socialists do not account for is that the wealth and income they want to "spread around" (to paraphrase the world's greatest anti-Hamiltonian, Barack Obama) has to be created by someone (typically by way of a corporation - gasp!). As in, we cannot print it. It must be made, a uniquely American concept that has served the world well.

The centerpoint of the socialist attack is on these producers. They use guilt. They employ strong arm tactics, leveraging the powers of the government bureaucracy to exact through taxation or regulation the resources needed to further the "spread". An additional obligation to society is created, a society that, perversely, does not include the targeted donor. It is as if the founding tenets of the American system do not matter in the least. Individualism is only to be tolerated in subservience to the collective. In reality, the Founding Fathers viewed individualism as the collective. If you subscribe to Barack Obama's view of the world, you must necessarily redact a substantial portion of the Declaration of Independence and consider Publius an alchemist.

When the house falls, as it has globally in the recent financial crisis, where a suspension of incentives results in calamity, it is the free market that is blamed. The free market is simply the monicker we use for the aggregate of human desires and production. It leaves no one behind who accepts it. The socialist alternative demands that one man rule over another because there is more of the former than the latter. That is not a democratic republic. That is a mobocracy.