As of Tuesday this week, the Dow Jones Industrial Average had plummeted nearly 2000 points over five days; more than ten percent of its value had disappeared. What the heck is going on?
Fortunately, Wisconsin Governor (and Republican presidential hopeful) Scott Walker has an explanation: it's China's fault (facilitated, as usual, by a clueless President Obama). While America plays fair—as always!—almost everyone else (China, in this case) cheats. "Americans," Governor Walker declares, "are struggling to cope with the fall in today's markets driven in part by China's slowing economy and the fact that they actively manipulate their economy. Rather than honoring Chinese President Xi Jinping with an official state visit next month, President Obama should focus on holding China accountable over its increasing attempts to undermine U.S. interests."
Yes! Hold them accountable! It's as if China's leaders haven't prioritized the interests of American investors at all. Who—in this brutal, unforgiving global economy—is looking out for the well-being of US investors?
Perhaps the bold, incisive Governor Walker has it just right: China's "manipulation of its economy" is unwise, unfair, and wrong! Perhaps China's financial markets need a shot of economic freedom, the kind championed by Ronald Reagan; the kind that has made America's financial markets Number One: the freedom to gamble other people's money on outrageously risky assets; the freedom to swear-to-god that these outrageously risky assets are virtually risk free; the freedom to pay ratings agencies to lie about the riskiness of these toxic assets; the freedom to pitch these assets to clients while acknowledging privately that they are "shit," and the freedom to peddle predatory loans to low income borrowers (who, for their part, are free to sign away their financial futures without the burden of cumbersome consumer protection laws).
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And if somehow this doesn't all work out, American financial institutions are free to drag the global economy down the tubes, while happily exercising their freedom to accept trillions of dollars in bailouts from the US Treasury and the Fed. Boards of directors are, in turn, free to use this manna from tax-payers to pay their employees lavish bonuses (for a job well done!). And—because the constitution guarantees free speech—these abundantly compensated financiers are free to contribute unlimited amounts of money to the PACs of legislators who are, in turn, free to further deregulate the financial sector - thus ensuring the freedom of financial institutions to maximize their profits long into the future.
And, of course, these financiers enjoy complete freedom from prosecution.
In short, a virtuous cycle! It turns out that the French are right (for once!): Laissez-faire totally works!
Chinese-style "manipulation" is clearly a disaster. Sure, it has generated 35 years of stunning economic growth. But it has also forced rich people around the world to endure this brief, anxiety-provoking drop in stock prices! American-style economic freedom, on the other hand, has liberated Americans from the burdens of labor law, consumer protection, responsible environmental stewardship, and accountability for centuries of racist plunder. It has also brought stagnant wages, soaring inequality, and an occasional meltdown of the global economy. Fortunately, Americans understand that freedom isn't free!