Wednesday, June 17, 2009

Test Pattern

We can take that tonight
We can make them, that's right
We can break them tonight
Don't misunderstand
--U2

Just finished grading some exams so I suppose I'm in an evaluative mood. Let's briefly consider two problems President Obama is dealing with.

Iran Election Strife. Folks, particularly those on the Right, are criticizing Obama for not getting more involved in this issue. Folks have been disenfranchised, they argue. They deserve democracy, freedom, etc. Not to mention Iran's nuke wildcard. Sorry, but this is not our concern. We've allocated too much time and resources in the past meddling in the sovereign concerns of others. It's not our place to impose our belief system on others. Besides, we can't afford it. Correct answer, Mr President. Stay out of the way.

Banking Reg Increase. Per the President: "An absence of oversight engendered systematic, and systemic, abuse. This is just wrongheaded. Free, unregulated markets are hardly to blame for our problems; few of us have experienced truly free markets in our lifetimes. Rather, it can be readily argued that the presence of regs and oversight in the system fostered systemic abuse (via moral hazard, etc). The outcome of increased government control over this industry is destined to be reduced innovation and, ultimately, lower standard of living. Incorrect answer, Mr President. Get out of the way.

These two responses point out a glaring inconsistency in the operating philosophy of the modern day Left: Let's not meddle in the conflicts of others (it's not the U.S. government's place to intervene in other people's business) but let's meddle extensively in the affairs of our own people (it is the U.S. government's place to intervene in the our own people's business).

On the other side of the political spectrum, the operating philosophy of the modern day Right tends to be generally inconsistent in the reverse direction (heavy government intervention abroad, light at home).

So, one right and one wrong. If you're a hitter, you're batting .500 and destined for the Hall of Fame. But if you're a student writing the exam I just graded, 50% would earn you low score in the class.

2 comments:

OSR said...

I'm not sure that I agree. Campaign contributions and revolving door political appointments effectively nullified banking supervision in the last decade. The result was innovation like 30:1 leverage, bogus MBS ratings, and hedge books so unbalanced, massive intervention was required. Unless we are prepared to let the banks fail the next time they do this, supervision seems appropriate.

fordmw said...

You need to ask how the presence of (not absence of) regulation and intervention facilitated these 'innovations.' Moreover, regulatory schemes are destined to fail over time (political influence, cognitive limitation, attention 'drift').