Published: September 25, 2008 11:10 pm            

Toasting the economy

Today, let’s toast Adam Smith.

Smith is the father of the ideological underpinnings of free market capitalism.

Smith, a Scot who lived from 1723-1790, is arguably history’s most famous and most popular economist.

Smith’s massive five-volume masterpiece “The Wealth of Nations” expressed the basic notions of modern capitalism before it was even called capitalism.

Smith and the streams of brilliance in his famous economics treatise are oft-quoted by fiscal conservatives.

Smith’s enunciation of the laissez faire theory has been wildly popular with fiscal conservatives ever since the publication of his economics masterwork in 1776 — an especially fitting year for the intellectual articulation of pure capitalism. That, of course, the same year the purest democracy known to humankind articulated its own political philosophy: the United States of America.

Laissez faire essentially translates “let do,” and in the concept Smith hammered home his belief that free markets functioned best when the “invisible hand” of free market corrections adjusted prices and the flow of goods, i.e. zero government involvement in trade and economics was ideal for the proper, healthy flow of robust capitalistic markets.

Fiscal conservatives absolutely adore the phrase “laissez faire.”

President Ronald Reagan, the godfather of the modern Republican party, loved bashing on government and its needless, negative influence on the free market.

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it,” goes one famous Reagan quip.

Here are three more famous witticisms de Reagan:

“Government always finds a need for whatever money it gets.”

“Government does not solve problems; it subsidizes them.”

“Man is not free unless government is limited.”

Reagan is recognized by many conservatives today as the almost sacrosanct savior of the Republican party and as the immediate precursor to neo-conservatism.

It’s strange President George W. Bush, and the majority of Republican lawmakers on Capitol Hill, are frantically supportive of Bush’s proposal to use $700 million of taxpayer cash to finance a rescue of Wall Street. They’re trying to prevent the Second Great Depression, I believe.

How odd of the political party that bashes government and routinely states government should keep its greedy paw out of the private sector to bail out an entire mortgage lending industry.

Seven hundred billion here, $700 billion there, and pretty soon you’re talking about real money. 

Smith offered the world an explanation of how rational self-interest in a free-market economy leads to economic health for everyone contributing to the economy.

“Someone earning money by his own labor benefits himself. Unknowingly, he also benefits society, because to earn income on his labor in a competitive market, he must produce something others value,” as econlib.org paraphrases Smith.

But back to Dutch. The retired Hollywood actor was famous for this joke, “The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”

That’s exactly what the $700 billion Bush Bailout Plan is proposing.

Use 7⁄10 of a trillion dollars of U.S. tax dollars to rescue an industry and collateral investments which were run with corrupt and greedy manners.

It’s just so odd to hear the people who love to quote Smith and idolize Reagan talk about government socialization of mortgage banking in the U.S.

I just can’t seem to square the Bush Bailout Plan in my mind.

 

Kinnamon is a staff writer for the News & Eagle. Contact him at dave.kinnamon@ sbcglobal.net.