The blame game is on. And we have a culprit identified: Ronald Reagan caused our financial crisis.
Barney Frank wants to call September 15th “free enterprise day because that was the one day in which the Bush administration apparently stuck to its professed commitment to free enterprise….”
He says that a “true understanding” capitalism recognizes the need for “appropriate regulation.” He says that “by virtually totally abstaining from the market” Republicans in Congress and the Bush Administration caused the financial problem. He doesn’t understand “free enterprise” or the facts, although I’ll agree that we lacked “appropriate” regulation.
(And I was surprised during the Biden and Palin debate that Governor Palin didn’t answer the question about regulation. The problem, again, was the government, so why not defend deregulation? Why couldn’t she have made a stronger case for free enterprise? Doesn’t she like freedom?)
The Left wants us all to believe that the “free market” can “fail” and then we all suffer. Only the government can do what’s right and protect us. But what’s the failure of a buyer and seller agreeing to an exchange because they both think they will benefit? If the failure is fraud, we have laws for that…. Is the failure a lack of payment? or non-delivery of goods? We have laws, laws, and more laws for all aspects of commercial transactions.
Law enforcement, of course, is not premised on the coming of a Utopian age when mankind lives in perfect harmony. Instead, it’s premised on the idea of mortal man being fallible and the breaking of laws. It’s also requires proof in court.
So what’s the proof? who’s the culprit? Does Barney understand “appropriate”?
The dictionary doesn’t seem to help much in understanding what is “appropriate” legislation of “free enterprise.” The OED defines “appropriate” as “specially fitted or suitable, proper” and “enterprise” as “a bold, arduous, or momentous undertaking” and “free enterprise” as “the freedom of private business from state control, esp. as an economic doctrine.” This doesn’t help much because we only see here that “free enterprise” means “freedom of private business” and we don’t see what’s “fitted or suitable” regulation of “free enterprise.”
Now it might seem that “appropriate” doesn’t help much, but that’s not entirely the case. Consider who should decide what’s “appropriate”? If “appropriate” is whatever Barney decides, then we lack a rule of law. And without a rule of law, we lack liberty. (See Federalist No. 51 and Montesquieu’s definition of liberty in the Spirit of the Laws, Book 11, Chapter 3. )
But with the Community Reinvestment Act that encouraged loans to low and moderate income (LMI) applicants, guess who is deciding “appropriate” regulation? Under the “legislation,” banks were rated on their community development efforts. And community development is open to the “public” for “comment,” Appendix A (at end of CFR 228). So bank ratings of their compliance with the law and approval of mergers, etc. were subject to the comments of “community organizers” like ACORN and NACA. (ACORN says this comment period is “crucial.” And see ACORN’s “comments” in opposition to modifying CRA.)
So banks aren’t under the “appropriate” regulation of the rule of law as applied in court with independent judges. As explained here in 2000, they are subject to a form of extortion. Banks either make community “investments” or their CRA rating is lowered because of adverse “comments” by groups like ACORN and NACA.
There’s nothing “appropriate” or “democratic” or “community” about regulation by special interest “comments” designed to extort money from people without the protection of an independent court.
The comments that should count are the ones we make to our congressmen.
Free enterprise means that “government” isn’t the only entity for deciding what’s “appropriate.” What’s “appropriate” is not the mere will of Barney, or merely a matter of power. A sound loan is a sound loan because of the particular facts of the case, not because some ideology says making LMI loans and “community development” is a good thing to do. Barney’s ideology may say that, but Barney’s voice is not the voice of God, it’s just blarney.
The problem, again, is that what’s “appropriate” is not relative. The freedom of “free enterprise” is not relative but is grounded in morality. Free enterprise is merely an aspect of political liberty and as Montesquieu said, “political liberty does not consist in an unlimited freedom [to act as we please]. In governments, that is, in societies directed by laws, liberty can consist only in the power of doing what we ought to will, and in not being constrained to do what we ought not to will.”