Wednesday, April 29, 2009

Government Is the Systemic Risk (Sheldon Richman)

Sheldon Richman would like the government to stop "protecting" us:

Sheldon RichmanThe Obama administration and congressional leaders assure us that the government can protect us from the “systemic risk” posed by big banks, insurance companies, and hedge funds.

But who will protect us from the government?

In light of all we’ve learned about the national government’s conduct in both domestic and foreign affairs over recent years, there is clearly no greater risk to American society than the government itself. Yet people look to it for security. That, I submit, is the fruit of propaganda and popular complacency. When can we expect the “eternal vigilance” that was supposed to keep us free?

One could go on at length about how the government — which includes the Great Counterfeiter, the Federal Reserve — threw the economy into turmoil with the housing boom and subsequent bust. Blame, as the politicians will, “Wall Street,” the fact remains that none of the firms there could have engaged in such systemically risky behavior without the partnership of the government. When Congress and the White House push and facilitate the guarantee of bad mortgage loans on a wide scale, while the Fed provides at least some of the money and a safety net to banks that get into trouble, you have the makings of a disaster that could never have occurred in a free market. Those who blame greed and deregulation have willfully blinded themselves for ideological reasons. The facts are plain for all who are curious.

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