The Dark Knight of Conservatism

You had me right up until the Bush quote:

I abandoned free market principles to save the free market system. 

m no Bush apologist, and far from even being a Bush supporter.  But sometimes the man does sensible things that can surprise a man.

A second look:

One thing that has been crippling conservatives over the years is ideological inflexibility.  This manifests itself in being unable to find a solution because the solution does not fit in with narrow ideological dictates, or in finding a faulty solution that falls within the ideological dictates but fails to answer the problem.

That's why so many will remember the Republicans as being the party of Katrina.  You've earned that, and it was a hard-fought battle.

The bad parts of TARP are limited to two:

limits & oversight.

And that was Paulson that went asking for it.

While I'm at it, there is a tendency on the Right to confuse Keynesianism with neo-Keynesianism, and to argue against the latter in order to discredit the former.  Get it right.

Again, I am no fan of David Brooks.  Even so, I congratulate him on a job well done when he is inclined to do so.  And such a congratulations is in order.

Just last week on the 'Shields & Brooks' segment from the News Hour, Brooks answered much the same white collar vs. blue collar argument against the bailout.  Wall Street had already taken a hit-- they took huge hits.  So it was not unseemly to ask the auto industry to take a hit as well before any bailout action.

Even more, I'm afraid you missed the core of conservative ideology.

Government is best small for what reason?

Is ineffective government the best government?

Were someone to steal the radio from your car, is it best to file a report with the police or to visit the local godfather?

So how small is it that we should really want government to be?

The Small Government crowd seems to have forgotten that government has a legitimate function.

Just as the economic freedom crowd seems to have forgotten that bank transactions are not my primary activity.

We know how badly we are screwed with the bailout, and fair points are made here.

But what if Paulson was right, and we were days away from a total freezeup in the financial system .....ATM's not working; out of state paychecks being placed on hold; auto loans being unfundable.

Which is what "Blackhedd" at RedState thinks was a very real possibility this fall.

"Conservative principles" might have been held in even lower regard by the general public than they are now--and the socialists might have an even more convincing mandate to screw up the economy.

Like the movie WarGames "The only winning move was not to play". The point where that could have been avoided was at the latest the spring of 2008; where BearStearns was allowed to do a one-off orderly liquidation and Countrywide allowed to be subsumed into BOA. At that point the financial sector might have survived a prompt self-administered enema; by the fall the extra weight keeping failing players in the game proved overwhelming.

Once the public starts expecting the government "cat" to catch all the mice, they stop buying their own mousetraps.  And the mouse problem tends to keep escalating, since individuals will wait until the govenrment cat arrives rather the address their own problems, and the cats will lobby to make sure there are plenty of well paid cats at all times.  That's the long term problem.

Much as the Randian in me hates WoodbridgeVa's distinction between rights and economic policies, I have to admit he's got a point on one level. We on the right have been getting it rather backwards. Economic policies should be argued for because they protect individual rights (as Milton Friedman argued for them in Capitalism and Freedom), not just because they're ends in themselves.

I also have to concede, despite the rather strawmanish character of Progressive Traditionalist's characterization of the Chicago School, that he has a point too, though it's not about the Chicago School. I know the Chicago School, and no economist from there would suggest that less regulation is always good, irrespective of whether it makes sense in the context of the larger system. In fact, I can't think of an economist on earth who would argue such a proposition. By contrast, I can think of countless politicians who would do so because politicians are less interested in having ideas that make sense than in having ideas that sell and are easy to understand and "regulators hate freedom" is both easy to sell and easy to understand. We have to stop putting so much faith in Republican politicians to popularize our ideas as conservatives. Back in the day, both Milton Friedman and William F. Buckley had TV shows where they could popularize the sensible version of conservative ideas and leave the rhetoric to the politicians. It's notable that neither one of those men were politicians themselves.

Don't get me wrong. I'm not saying that no economist would argue that in an optimal world, no regulation would exist. Murray Rothbard and Ludwig von Mises would probably argue such a thing. I agree with them to a point - a completely unregulated market can work in theory. The problem is that a completely unregulated market has never existed. Any time you have a State, you necessarily socialize something, and as no one on the current scene is arguing for anarcho-capitalism, we're probably never going to have a completely unregulated market. As such, I'm going to defer to that infamously socialist RINO Friedrich von Hayek and suggest that certain forms of regulation are acceptable, provided they are constructed in line with the rule of law principle, and not in order to redistribute income and/or otherwise attempt to restructure society. Considering that Hayek  comes from the Austrian school, which makes the Chicago school look like Paul Krugman, I think there's no need to worry about blindly overturning regulations, provided economists are in the drivers' seat rather than politicians and lobbyists.

But getting to the central contention of this post, that the Democratic Jokers have won -- I disagree both with the idea that the Democrats are the Joker and that they've won. Much as Nancy Pelosi, with her ever-present botoxed smile, is just begging to be photoshopped with a word bubble saying "why so serious", I don't buy the idea that the Democrats are a bunch of crazy anarchist nihilists in the economic sphere. I see the Democrats as much more like Harvey Dent - a bunch of tragically naive do-gooders who think they can clean up the world without getting hurt themselves. You know who I think the Joker is? The market. Consider:

"I'm not a schemer. I try to show the schemers how pathetic their attempts to control things really are."

We've been trying desperately to avert a recession, yet the market just keeps on plunging. Why? Because we can't control it. All we can do is try and change the rules of the game it plays, but we can't make the market do anything directly and even if we could, there would be chaotic unforeseen externalities. See Thomas Sowell's book Knowledge and Decisions for a more complete argument of why this is, but the most basic way of explaining it is that there's just too much information in the market for even a supercomputer to comprehend. The market is beyond our comprehension both morally and practically. It just does things. It has no plan. It's a dog chasing cars. Why it  chases the cars or if it should chase the cars is irrelevant. Praxeology makes it do so anyway. And because of the screwed up political incentives we have in Washington, the regulatory structure has made this already unpredictable entity go as mad as the Joker.

The Republicans could be Batman in this situation, and as the original poster points out, some of them have been. But others, tired of seeing one economic paradigm after another get killed, have decided to take off their masks and turn themselves in. They've bought into the bailouts. They've surrendered, thinking it will make the market stop killing businesses. It hasn't. The market won't stop. When the rules binding it become a bad joke, it will just sit back and watch the world burn.

So what should the Republicans do? The same thing Margaret Thatcher  did in England in the early 80's when the market was wreaking havoc on her economy. The same thing the Butler Alfred said to do in The Dark Knight: "Endure, Master Wayne. Take it. They'll hate you for it, but that's the point of Batman. He can be the outcast. He can make the choice that no one else will face. The right choice."

Finally, I disagree with the original poster that the Joker won in the Dark Knight. Batman was not morally compromised, except in the eyes of Gotham's residents, and being good is not the same thing as being popular. Batman made the ultimate sacrifice and let people view him as an outcast because he wanted to make the right choice. The Republicans may need to do the same.

ProgTrad,

I agree completely with your point about individual rights. The only difference between us is that I believe certain economic policies do protect individual rights, whereas you are more skeptical. We are in agreement on principle.

With that said, trying to use Alan Greenspan as an example of a free marketeer who turned on the free market is like trying to use Vanilla Ice as an example of a cool rapper who decided  rap wasn't cool anymore. Greenspan has been  considered a sellout and a traitor by the libertarian community for a while. With that said, I don't think I or a certain Chicago school economist disagree with his conclusion: that businesses have a "suicidal impulse" to game the system. That's why I want the rules of this "game" to make sense. I'm sorry if you think Hayek was a false equivocation. I actually wasn't trying to equivocate him to anything. I was pointing him out as flatly unequal to the Chicago school because his vision of economics is actually further to the right than theirs. Besides, the article above by Friedman shows that he himself doesn't blindly apologize for corruption.

"1). Insist on balanced budgets-- period.2). Address the currency manipulation with the Chinese regime."

Hear, hear! Get this man a party chairmanship!

Notice that I said businesses not executives. And from both Friedman's and my perspective, having to be bailed out IS a suicide. Even if your company gets saved, you're now reduced to accepting whatever terms the government wants, even to the point of driving all the way to Washington just to appease a couple of class warfare-obsessed Democrats. Also, it's not a foregone conclusion that the taxpayers will bail them out - in fact, it's only foregone under economically statist administrations like Bush's and what looks like Obama's.