Back to developing the theme of this post. In the face of this financial debacle the call of many free market advocates has been for less regulation! Mimicking this call, Tim Lee wrote "Real Regulators" at the Technological Liberation Front, in regards to net neutrality, "Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents." What is bothersome is that Tim's comment is a sample representative of the blind repetition of a tired dogma that refuses to really examine why a free market failure occurred. The whine is that it always the fault of regulation. This is not a demonstration of the rationale thinking that our free market is supposedly founded upon.
In my response to Tim's post I wrote:
Usually, the claim is made that the consumer will quickly discover the abuse and that market pressures will reign in companies so that they will once again operate within the idyllic principles of the free market. The anecdotal evidence unfortunately is that this is a naive and utopian concept. The Madoff affair scheme has evidently gone on for decades and the automotive industry has been failing for decades. In fact, the automotive corporate executive have apparently been operating their companies in an "incompetent, technically confused" manner. Now, in the "best" traditions of the free market, these corporate executives are now groveling to the government to bail them out of their incompetence. So the executives of our automotive and financial industries who have claimed to operate on free market principles, instead of accepting responsibility for their failed actions now want socialism.Those who always seek less regulation should take a long hard look in the mirror. True, regulations can be implemented badly, the regulators may be dishonest, they may not truly understand what they are regulating. The existence or non-existence of regulation does not cause anyone to behave badly. The corporate executives who have brought our economy down did it in a purposeful and willful manner. It is time that the finger of blame be pointed at them.
Not only should the finger of blame be pointed at them, but they need to realize that if we are to live in a civil society that they need to have a degree of social responsibility. The Madoff affair is a prime example of what happens when one can avoid regulation and is not constrained by social responsibility. Those who mindless whine about regulation need undertake some deep soul searching self-criticism.