Tuesday, September 30, 2008


Bail-out ideology

I was amused to find this commentary on why the US government's economic bail-out plan should not go ahead from a Harvard economist. Any analysis of a problem that starts with "well, we shouldn't have been here in the first place" is just completely unconnected to the real world. By definition we are here, and the question is how do we best get out, not where should we have been instead. There isn't a place for "if only...". For this academic, however, ideology is all that matters. Wrong thinking got us here, only "right" thinking will get us out. If government intervention is wrong in principle and responsible for this mess, he argues, it must follow that the best - the only - thing now is for government to keep out. The possibility that government just might do the right thing is simply not thinkable, apparently. Government is automatically bad, bad, bad. No government is automatically good, good, good. He gets paid for this?

Somehow, I reckon he has a tenured position. I suspect his house is not about to be repossessed. I bet he's not clipping coupons. I bet he's relatively immune from the law of unintended consequences, from the inevitable wash-through from Wall Street into the lives of ordinary people. A comfort zone which makes a theory easy to hold and expound.

Ideology is a powerful force for good and evil. But it makes it hard for ideologues to differentiate between the two. The quote "in order to save the village we had to destroy it" comes forcibly to mind.

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