Coast to Coast Does not Quite Get It

I usually spend the weekend working outside, visiting friends, or running around dong the things that I do not have time for all week. By 9:00 or so I usually am home trying to get caught up on indoor chores. Inevitably, I turn the radio on. I do not watch television because it requires your complete attention. You can't do anything else. Usually I listen to to Coast to Coast AM with George Noori, who took over for Art Bell. As much as I disagree with the politics and economics of most guests, another guest always comes along to balance it out.

What they do not have, which is a shortcoming common to most news and commentary forums, is a true free market, libertarian, Austrian economic outlook. They do take cognizance of their existence but only long enough to mischaracterize and thereby dismiss their ideas. For instance tonight, Mr. Noori and the guest, author of "The Looting of America," talk about Ayan Rand. They decide that she and her like believe in "enlightened self interest." They define this as the belief that by seeking what is best for ourselves, we will serve society as a whole. Unfortunately, they say, this has not worked. They of course are ignoring for the most part the place for charity but this is only the trivial case. The more important issue they do not understand is the importance of distortions by government involvement.

This is exactly the error of progressives. Progressives create a vast regulatory structure in order to steer business in such a way that they will have an incentive to help society in general, as a by-product or directly by their profit seeking activity. This is doomed to failure. Finance, the most regulated business, follows the rules that government regulators set up. Within the framework, they find a way to make more money that the progressive like so the progressives say they are gaming the system. This is also a trivial aspects of what happens. More at the core is the implied government guarantee when they business follow the rules, against their better judgment. For example, when banks made government encouraged, sponsored, or even mandated risky loans, they were expecting some type of government bailout and playbacks. Financial engineers figured out how to make money on risky loans that government had encouraged them to do.

When things go wrong, as the schemes of the progressives eventually do, business is blamed and more regulations are enacted. There is always a new recipe to fix things. Very often, as now, capitalism itself is blamed. Mr. Noori favors a "moral capitalism." He has good instincts but is no match against the progressive plans. Progressives will never acknowledge that it is the regulation itself that leads to the problem. Business can never make a big mess on it own. The cooperation of or forcible intervention by government is needed to really screw things up.

Unfortunately, the guest on Coast to Coast tonight is essentially a progressive soldier. He is attacking banks and Wall Street, not to have a discussion on developing a theory of government and finance interface. His mission is to help get a regulatory bill past by this congress. In this he joins virtually all of the press. With BHO and his operatives pulling the strings, any bill passed now will be a virtual take over of the financial functions by the government.