A Failure of Government

In his article, “U.S. Woes Open Door for China” (WSJ Dec.23), Gerald Seib asserts that developing nations may be attracted to the Chinese economic model of central government control over “the American model of unfettered capitalism.” Unfettered?

As Seinfeld might say, “It’s fettered alright!” In fact it’s all the ‘fettering’ that is the core of the problem. A dangerous consequence of the ongoing financial mess and ensuing recession is that anti-free market types are promoting the idea that this is all a result of a failure of capitalism. It was not a failure of capitalism. It was a failure of government.

I’m referring to: 1) the Federal Reserve maintaining negative real interest rates for too long after the bursting of the tech-stock bubble, 2) The Community Reinvestment Act which forced banks to make bad loans and 3) Congress’ incompetence in its structure and oversight of Fannie Mae and Freddie Mac.

The Dems, soon to have nearly absolute control, will inevitably use the “failure of unfettered capitalism” canard to further encumber the free market with increased regulatory burdens. This will only serve to delay the eventual recovery and lead to slower economic growth in the future.

An early portent of this is the appointment of Rep. Hilda Solis as one of the most pro-union Secretaries of Labor ever. She received 3/4ths of her campaign contributions from unions and voted with the AFL-CIO 97 % of the time. She has declared her intention to use her position to increase the power of labor unions.

Ms. Solis is also a supporter of fraudulently named Free Choice Act, which would replace secret ballots in union elections with something called cardcheck. This gives union thugs the opportunity to intimidate workers into signing up for a union in their workplace whether they want one or not.

Let’s hope we don’t see more industries succumb to the same uncompetitive labor policies that have wrecked our steel and auto industries and given us a K-12 education system that consistently puts our kids near the bottom of the developed world.