Cliff? What cliff?

Last month, I came across an article in the New York Times about the role of government in the marketplace. It briefly touches on the financial crisis that led to TARP and the so-called $787 billion "stimulus" bill. More directly, however, the author presents a view that highlights the dangers of politicizing the individual and major sectors of the economy. Fundamentally, the effect of inserting political influence over critical areas of the market (an effort that has been going on for several decades) by default creates additional "special interests" that because of their role in underpinning our financial and regulatory systems, must be "protected" at all costs, rather than allowing pure market forces to self-correct the issues. Much like the new hate crimes law, which adds special protections to certain classes of people, the over-involvement of government in our economy creates a privileged set of market sectors. From the Times (emphasis mine):

"President Dwight D. Eisenhower warned of the birth of a military-industrial complex. Today we have a financial-regulatory complex, and it has meant a consolidation of power and privilege. We’ve created a class of politically protected “too big to fail” institutions, and the current proposals for regulatory reform further cement this notion. Even more worrying, with so many explicit and implicit financial guarantees, we are courting a bigger financial crisis the next time something major goes wrong.

We should stop using political favors as a means of managing an economic sector. Unfortunately, though, recent experience with health care reform shows we are moving in the opposite direction and not heeding the basic lessons of the financial crisis. Finance and health care are two separate issues, of course, but in both cases we’re making the common mistake of digging in durable political protections for special interest groups."

By no means am I an expert on the economy, nor do I hold any particularly strong opinion on the level of regulation required to ensure that consumers and investors are protected from predatory institutions. I am, however, a firm believer in liberty and the right to buy, sell or use whatever product I choose, and to be able to make my own choices based on what I believe is the best value to me. When it comes to health care, I would highly prefer an a la carte solution so that I could pick and choose coverage benefits that make the most sense to me and my family. However, due to government regulation AND insurance provider restrictions, that will never come to pass. I do not want the government telling me what options I get to choose from, and neither do I think the government should dictate to insurance providers what "minimum standards" of coverage should be enforced. Otherwise, I end up with coverage I don't need at a price that can only be explained if the cost is actually intended to pay for somebody else's coverage. Which, of course, is precisely the intent of this proposed overhaul of health care. And, based on this breakdown of tax increases found inside the latest House bill, it means everybody is going to pay. (h/t: Hot Air)

So again, coming full circle, we have a stimulus that the administration claims has created or saved a million jobs, at a cost to the taxpayer that amounts to several hundred million dollars per job. How much do these jobs pay? Not that much, so where did the money really go? But we've been told that the institutions that received bailouts were "too big to fail" and that the gargantuan stimulus was necessary to save a million jobs. Why is it the government's responsibility to save or create any jobs in the first place? And that assumes any jobs were created in the first place, as even the AP and CBS question. Isn't it nice to know that our taxpayer dollars helped 129 people at a day care get raises?

The New York Times article closes with a final thought that I have no doubt will fall on deaf ears (emphasis mine):

"In short, we should return both the financial and medical sectors and, indeed, our entire economy to greater market discipline. We should move away from the general attitude of “too big to take a pay cut,” especially when the taxpayer is on the hook for the bill. If such changes sound daunting, it is a sign of how deep we have dug ourselves in. We haven’t yet learned from the banking crisis, and we’re still moving in the wrong direction pretty much across the board."

Eventually, everything is going to go bust, resulting most likely in even greater government control and influence over the markets. And we will quite possibly live to see it. I don't think even Alexander Hamilton would have gone quite this far.

But then again, I'm no expert. After all, America is "too big to fail," right? Follow the links; there's interesting stuff there.