Mr. R. Barron’s contention that we are involved in a ping pong match about the free market is as far from the truth as is his description of the free market itself. He writes as though there exists a mechanism (free market) which operates independently of any human intervention and miraculously determines the allocation of land, labor, and capital in a manner most conducive to democracy and the interests of humankind. The government in this simplistic tale of good and evil is the devil incarnate and its intervention into the marketplace is responsible for our past and present economic crisis.
The ideas of the Milton Friedman free market prophets are being discredited world wide and the ideological pillars of deregulation and privatization are crumbling. The free market is a political construct devised by self seeking individuals bent on self aggrandizement. Even more revealing that the free market nostrums are a sham is that we recently witnessed the biggest “heist” in American history. In collusion with the banking community the United States government transferred over 17 trillion dollars to the largest U.S. financial institutions.
Why was this necessary? The story has been told many times of the banks marketing toxic assets, primarily subprime mortgages that were transformed into collateralized mortgage obligations using bogus math and sold on the international market as high grade AAA rated securities when in reality they were worth little or were worthless. This scheme collapsed as reliable sources uncovered the lies, the robo-signing, documentation fraud, and other mendacious actions of the banking community.
The transfer of taxpayers money (over $17 trillion) to the investor class clearly elucidates the dictum that we have socialism for the rich and austerity for the rest of us.