Rep. Maxine Waters (D-Calif.), who last May vowed to nationalize the oil industry if it didn't cut gas prices, spent her interrogation time sounding like the sort of person who waits in line at the DMV while having a conversation with her handbag, only to finally ask the clerk why he's wasting her time. The Atlantic's Megan McArdle writes that watching Waters interrogate the CEOs was "like watching your crazy aunt challenge your boyfriend to prove that fairies aren't real."
One of the great things about capitalism is that, unlike socialism or, say, Bobby Knight, it can deal with failure. In fact, capitalism needs failure. Joseph Schumpeter called this "creative destruction." Your grandmother called it "making lemonade out of lemons." The beauty of free markets is that firms learn from their mistakes or they lose money, shrink and then go out of business. Governments, meanwhile, grow from their mistakes and learn to make money from them.
Under normal circumstances, the financial inferno would cause a lot of pain, but it would also burn away a lot of deadwood. The strongest firms would survive, and newer, healthier businesses would sprout from the ashes. Plummeting housing prices would make homes affordable for first-time buyers again, particularly those with good credit who live within their means.
Sure, we would still have a stimulus bill, with tax cuts and infrastructure spending and, yes, silly pork projects. And that would be fine. We would even have some kind of bailout of the banking industry, which became a mess in part because people like Christopher Dodd and Maxine Waters tried to play the banker in their own personal game of Monopoly.
But that's not what we got. Instead, the old adage "Everyone's a capitalist on the way up and a socialist on the way down" is kicking in. The thing is, if you're a socialist on the way down, you were never really a capitalist on the way up. Capitalism requires putting your own capital at risk.
What we do have is a grand adhocracy where "government," aka Barack Obama, Timothy Geithner, Nancy Pelosi and a dozen others, will figure everything out as they go. Businesses will rise or fall based on their skill at kissing up to the government.
And as sure as shinola, when government fails again, we'll be told that only government can save us.
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