Dark Star

This is a big vote, one likely to be studied and second-guessed for decades to come. But government’s first responsibility is to protect the freedoms and individual liberty of every American. As a free-market economist I unequivocally oppose this legislation because it violates the basic working tenets of free-market capitalism and individual responsibility.

Granting the Treasury broad authority to buy troubled assets from private entities poses a significant threat to taxpayers and fundamentally alters the relationship between the private economy and the federal government. Despite the sweeping breadth of the proposed bailout, there is virtually nothing in the bill that addresses the underlying problems that created the housing bubble and the oversized and over-leveraged financial services sector that grew with it [emphasis added -ed.]. Taxpayers have become Wall Street’s newest financier, with little more than a promise — and a report to Congress on “regulatory modernization” — that Congress will not let this happen again.

Indeed, many proponents of the bailout have tried to put the blame for this massive government intervention squarely on the market, asserting that free market capitalism has somehow failed and the only solution is more government intervention. Yet markets do not operate in a vacuum. In fact, government institutions can have a strong — and too often corrupting — influence on markets. In the specific predicament financial markets face today, there is a long history of government actions that have led to what is most accurately described as a government, not market, failure.