Wednesday, 25 March 2009

Lessons in govt meddling [updated]

Phil Goff is upset about the current government not renewing the terms of several Labour appointed member of broads of state-controlled companies, but as Paul Walker points out, “the problem seems to me to be that governments make these appointments in the first place.”

    Here's a simple answer to the problem of government appointments to state boards: privatise the companies. That way there will be no appointments for governments to make and the whole problem will go away.

Simple enough, eh?

GeithhnerAndMessiah It’s a point Timothy Geithner and his boss might like to get their heads around.  Specifically, if you don’t like the idea of AIG executives taking bonuses after being bailed out to the tune of US$180 billion, then don’t go bailing out private companies.  That way there’s be no huge bonuses paid out of taxpayers’ money, and the whole problem will go away.

Simple really, eh.

And if you don’t like the “scale of risk taking” taken on by companies like AIG, Mr Geithner, then give some thought to the moral hazard created when the government and all its agencies backstops private risk (as they’ve been doing) and then rewards all the risk-taking when the risk-takers have overdone it.  That way private companies will know in advance that they and they alone are responsible for the risks they choose to take.

Simple, huh.

And if you fail to heed these lessons, then don’t use the results of your meddling as an excuse to seize private companies, which is exactly what you now want the power to do.

In fact, if there’s a lesson in all of this –- one you, Mr Geithner, are undoubtedly already too morally impugned to grasp – it’s one that the rapidly increasing number of Ayn Rand readers are slowly realising:

    “If the critics of capitalism had bothered to read Ayn Rand, they would know that their attacks are part of a historical trend of blaming capitalism for the sins of government intervention--a trend that needs to stop if we are to prevent further economic damage.
“In The Voice of Reason, Rand wrote: ‘One of the methods used by statists to destroy capitalism consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary.’
“Is this not exactly what is happening?
“In Capitalism: The Unknown Ideal, she wrote: ‘If a detailed, factual study were made of all those instances in the history of American industry which have been used by the statists as an indictment of free enterprise and as an argument in favor of a government-controlled economy, it would be found that the actions blamed on businessmen were caused, necessitated, and made possible only by government intervention in business. The evils, popularly ascribed to big industrialists, were not the result of an unregulated industry, but of government power over industry. The villain in the picture was not the businessman, but the legislator, not free enterprise, but government controls.’”

UPDATE:  More news on the “rapidly increasing number of Ayn Rand readers” from James Valliant:

Atlas Shrugged is now #19 in all books at Amazon.
#1 in Books > Lit. & Fict. > Contemporary,
#1 in Books > Lit. & Fict. > General > Classics,
#1 in Books > Lit. & Fict. > World Lit,
#1 in Books > Literature & Fiction > Classics > United States,
#1 Authors, A-Z , and
#1 General > Classics.

Looks like the more that American Government destroys capitalism, the more people are desperate to learn about it.


  1. These sales ratings for Atlas Shrugged are the best news I can think of in years. To realise that intelligent ideas can still take hold even on a micro-scale is cause for hope.

    Long may it continue!

  2. From the Republican National Committee:

    "The uproar over $165 million in bonuses being dispensed to employees of AIG, the company receiving the largest amount of federal financial bailout funds, is another indictment of the rudderless Barack Obama White House.

    American taxpayers are rightly outraged. AIG has received $170 billion in public funds to clear up its bad investment losses -- giving the American public 80% ownership of the firm. Now these public funds are going toward lining this failed company's employees' deep pockets.

    And Democrats in Washington, however loud they may protest this use of taxpayers' funds, are directly responsible for this financial fiasco.

    President Obama, who never ran any organization of any size before being elected to be the chief executive of the United States, continues to underwhelm as crisis after crisis reveals his lack of experience, judgment, and character.

    He and his handpicked Treasury Secretary, Timothy Geithner, are trying to lay blame anywhere but upon themselves for not limiting compensation payouts as a condition for receiving public funds.

    But the truth is that the Obama Administration requested the exemption for AIG bonuses.

    Senator Chris Dodd, Chairman of the Senate Banking Committee, inserted an amendment in the $787 billion boondoggle at the urging of the Obama team to ensure that.

    Can you guess who received the most in campaign contributions from AIG in 2008? That's right -- Chris Dodd, who received over $103,000 in 2008, and almost a quarter of a million dollars since 2003.

    Second on that list? Barack Obama, who also received over $100,000 in campaign cash...."



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