From her Facebook page:
In the wake of the recent financial meltdown, Americans know that we need reform. Not only have many individuals learned lessons about personal responsibility through this, but we’ve been able to engage in a discussion about government’s appropriate role.
The current debate over financial reform demonstrates what happens when political leaders react to a crisis with a raft of new regulations. First off, the people involved in writing government regulations are often lobbyists from the very industry that the new laws are supposed to regulate, and that’s been the case here. It should surprise no one that financial lobbyists are flocking to DC this week. Of course, the big players who can afford lobbyists work the regulations in their favor, while their smaller competitors are left out in the cold. The result here are regulations that institutionalize the “too big to fail” mentality…
…J.P. Freire notes that President Obama received about seven times more money from Goldman than President Bush received from Enron. Of course, it’s not just the donations; it’s the revolving door. You’ll find the name Goldman Sachs on many an Obama administration résumé, including Rahm Emanuel’s and Tim Geithner’s chiefs of staff.
We need to be on our guard against such crony capitalism. We fought against distortion of the market in Alaska when we confronted “Big Oil,” or more specifically some of the players in the industry and in political office, who were taking the 49th state for a ride. My administration challenged lax rules that seemed to allow corruption, and we even challenged the largest corporation in the world at the time for not abiding by provisions in contracts it held with the state. When it came time to craft a plan for a natural gas pipeline, we insisted on transparency and a level playing field to ensure fair competition.
Reform, if its to be worth anything, at all, must ensure that everyone can enter the market and have the truth available to them. If we do that, then its fair and even if a company fails, it won’t be because someone was gaming the system. What blindsided us was that a few big, politically connected players were doing things which no one understood. This is what we must prevent in the future.
We had a grand opportunity in 2008 and 2009 to clean up the mess – had we let the “too big to fail” entities fail. We could have cleared out the corruption in the market simply by letting the corrupt players collapse. Instead of doing that, we rescued them with taxpayer money and now we’re writing regulations essentially at the behest of the people who created the problem in the first place. This just ensures we’ll have a repeat of the financial crash.
The free market is the only way to rationally determine the use of capital, labor and materials. Any attempt by a third party to decide for others how such things are to be used ends in disaster. But a free market is only free as long as people are free to do the right thing – as soon as people are free to do the wrong thing, then the system is corrupted, it is no longer free and the resultant misallocation of resources will guarantee a crash.
At this point its not so much about fixing the market as in re-creating it. Over the past 70 years we have massively skewed the system away from doing anything good. This is why our factories are in China, our farms are in Mexico and our mines are in Chile. It is why we have a glut of home-grown pornography but can’t seem to even make a pair of shoes here in the United States.
Our market is made for the corrupt – the corrupt in business and in government. Reform must make it for honest people – and we won’t get that if the industry lobbyists and their kept politicians in Congress write the rules.
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