Expect to hear a lot more of this in the year ahead, and not just from such noted economic thinkers as Arianna Huffington: “The collapse of Communism as a political system sounded the death knell for Marxism as an ideology. But while laissez-faire capitalism has been a monumental failure in practice, and soundly defeated at the polls, the ideology is still alive and kicking.” Ms. Huffington isn’t done yet, concluding, “It’s time to relegate free market fundamentalists to the same standing as Marxist ideologues: intellectual curiosities occasionally trotted out as relics of a failed philosophy.”
No mention of the Federal Reserve’s role in creating the bubble, artificially low interest rates, Fannie Mae or Freddie Mac, the Community Reinvestment Act, corporate welfare and crony capitalism, the increasing socialization of risk and growing federal role in the economy via the bailouts, the increases in spending and regulation that occurred even under the Republicans, or mark-to-market accounting. All of that is just “blame shifting.” Of course, no one argues that China’s economic growth over the past 20 years has breathed new life into communism. Why? Because we all know that the Chinese Communist Party no longer practices what can be called communism where it really counts for the economy. Similarly, it is foolish to call what the Republicans have delivered “laissez-faire capitalism” unless the term has no meaning besides a mixed economy run by the GOP. Whatever the failings of mainstream conservative economics — and there have been some — the truly laissez-faire Austrian school of economics was more accurate in its predictions about the current crisis than Huffington’s allies in Congress.
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