The Free Market

Today, the United States has the most draconian financial disclosure system in the developed world. People who keep their money in offshore banks to avoid taxes are considered traitors. And when a citizen demands a zone of financial autonomy, the government wants to know: "What exactly are you trying to hide?" The natural answer of a free people is: Everything. The state has no more right to know about your affairs than your ne'er-do-well cousin (who at least isn't holding a gun to your head).

President Clinton's pastor and spiritual advisor J. Philip Wogaman has shown great interest in economic theory and policy. A professor of Christian Social Ethics at Wesley Theological Seminary, Washington, D.C., and pastor of the Foundry Methodist Church, his writings on economic systems display a relentless moral condemnation of the market economy. But when it comes to judging the errors of government planning, regulation, and politics in general, he urges an attitude of unremitting forgiveness.

The Wright Brothers are so unusual from today's perspective, and still inspiring, because they did it all themselves. Tinkerers running an Ohio bicycle shop in the 1890s, the Wrights decided that by rethinking old assumptions and performing careful experiments good old Yankee ingenuity they could realize one of mankind's oldest dreams.

The field in economics called "Industrial Organization" is the very foundation of antitrust activity by government. And if you thought antitrust action was little more than one business using government to smash its competitors, The Economist is here to correct you.

The Y2K computer bug isn't like a natural disaster or mass disease. It is a technical problem with a technical fix that can be overcome with work and time. However, and without speculating about the ultimate fallout from the problem, the bug has exposed a very real and deep infraction that has long plagued the U.S. banking system.

The journalist, television commentator, and former presidential candidate Patrick J. Buchanan has been sharply criticized by his fellow Republicans for allegedly betraying Republican party "free-market" principles in his new book, The Great Betrayal. In the book Buchanan argues for protectionism and claims to have presented the strongest case ever made for "economic nationalism." This, his Republican critics allege, is contrary to what Republicans have always stood for.

Taxes distort the price system and always alter behavior away from the free-market ideal. That is why, as J.B. Say said, the best tax is always the lowest tax. But in recent years, state and local governments have been using the tax system, along with direct subsidies of all sorts, to influence where particular firms locate, all in an effort to generate more growth and thus more tax revenue. Can states and localities really "buy growth" for themselves through this means?

Former National Football League star Walter Payton has been stricken by a rare liver disease and needs a transplant in order to live. Unfortunately, the demand for available organs far outstrips the supply, and several thousand Americans this year will die waiting for those life-saving organs.

In this year of Millennium Lists ("Best Ten Songs of the Millennium," etc.), the Wall Street Journal tried its hand at the ten economists--whom it called the "best and brightest"--who have "made a difference" in the last thousand years. Of course, the big problem in twentieth-century intellectual history is that the "best and the brightest" were not the ones who "made a difference." While the list did contain some names to cheer (Aquinas, Hayek, and Schumpeter) it also had plenty to boo (Marx, Keynes, and Veblen).

The Equal Pay Act of 1963 trampled on the rights of states to regulate their own labor markets, by overturning local laws enacted to protect women from working long hours, working at night, lifting heavy objects, and working during pregnancy. In addition, the 1963 law prohibited employers and employees from voluntarily agreeing to separate pay scales for men and women.

If there were justice in the world, Joan Claybrook, the head of the National Highway Transportation Safety Administration during the Carter administration, would be handcuffed to the steering column of a Volkswagen Beetle while an air bag was repeatedly blown up in her face. While in the government Claybrook forced on us the mandatory air bag rule. Then years later, after dozens of children were killed by air bags, she lied about her role in making them mandatory, as attorney Sam Kazman recently proved in the pages of the Wall Street Journal.

What is it the Justice Department wants out of the biggest credit-card associations? Is duality in credit-card membership, the freedom for a bank to be a member of both major credit-card associations in the United States, good or bad? Is it legal or illegal? Is it a system that promotes cartels or a system that results in vigorous price cutting much to the consumer's benefit?

To hear educators and activists talk, one might actually believe that apathy threatens to become the defining existential feature of American youth.

The policy agenda of the Clinton administration is usually described as halting, pragmatic, and poll driven. But in its approach to the issue of medical insurance and the drive to socialize medical care, it has been systematic, principled, and highly strategic. The Clinton government is using the failures and internal contradictions of the welfare state to pursue a program of universal entitlements.

Creative accounting by the Clinton administration has taken the government's budgetary imbalances out of the media's spotlight. But there is no basis for believing that we are entering a new era of fiscal responsibility. Deficits are likely to dominate future decades just as they dominated the past three.

Unreconstructed Keynesians the world over are now calling for a "Global New Deal" ostensibly to put an end to the business cycle once and for all.

In what can only be termed as truly bizarre, an Alabama local of the steelworkers union demanded that Alabama Governor Fob James close the international port at Mobile to all steel imports. Besides the fact that it would be clearly a violation of the U.S. Constitution for the governor to grant the union's demands, it would illegally abrogate existing contracts between suppliers and purchasers. It would also be bad economics.

The most talked-about financial failure of the year is Long-Term Capital Management, an investment partnership (loosely termed a hedge fund) run by Wall Street darling John Meriwether.

Politics takes no account of individuals. You and I are merely a tiny speck on the vast blob called "the American people," and what this blob "thinks" is only relevant insofar as it accords with a political agenda advantageous to the State and its friends.

The phrase of the day is "moral hazard." It's something everyone seems to think is a bad thing, but few are willing to do anything about, certainly not Alan Greenspan. So far, he's on record backing the Mexican bailout, the Asian bailout, the bailout of Long-Term Capital Management, and more IMF funding, despite the financial dangers all these create down the line.