Wednesday, 17 September 2008

Hong Kong is world's most free economy: Fraser Institute

There is something endearing about how the Fraser Institute continues to bumble along blissfully unaware of the pillars of the free market economy collapsing around it as it pronounces. There is a network of these right wing "think tanks" across North America. Except that they are not supposed to think too deeply - or indeed question the wisdom of the right wing agenda. "the importance of letting people get on with their lives" i.e. without interference from government.

Except they don't really mean that either. It is not people they are concerned about but corporations.

The collapse of Wall Street - and related financial institutions in other countries too - is the direct result of deregulation. During the Bush administration almost all the regulatory framework surrounding banks and other financial institutions were either relaxed or removed altogether. Many of these rules had been put in place in the wake of the last great crash (1929) and the subsequent banking crisis (1931) with a view to preventing such events recurring. So it should come as no surprise that recent events on Wall Street bear a very strong similarity to what happened then.

And, of course, the only solution to these financial problems is for the government to step in and prop up these worthless banks and insurance companies with taxpayers money. The government is expected, always and everywhere, to come to the rescue of the free market titans when they demonstrate their herd instincts and basic foolishness.

Deregulation has now been shown to be a very silly thing to do - and even John McCain is advocating tougher rules. He really couldn't do anything else, could he. And while we get to watch AIG pulled out of the muck, and Lehman Brothers' assets get snapped up at firesale prices by Barclays (how much longer before they need to rescued like HBOS?) there is the Fraser Institute bleating on about economic freedom.

Crisis? What crisis?

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