I'm considering making a movie. It will be a sequel to a much-watched initial movie, Global Financial Crisis that I didn't make, but I know what went into its development. I already have a lot of supporters, those who know that, to promote their economically crippling ideas, the Loony Left conveniently remain oblivious to the reality that free market policies have lifted people from poverty in large numbers. Yet, in the wake of the economic crisis, these Loons are promoting fondness for socialism over capitalism. Politicians, socialist commentators, and Mike Moore talk about social democracy, democratic socialism, and social justice, and look to the cloudless sky as they proudly proclaim that a small group of elites can, and must, create a better world (cue: DPRK national anthem www.youtube.com/watch?v=FERGk9L8lvI).
Their form of "progressive economics", which places government at the centre of the economy, resurfaced with alarming rhetoric at the Pittsburgh G20 meeting, essentially a large group of countries making co-ordinated but wrong decisions based on a flawed set of beliefs.
The latest G20 statement was full of talk about a profound crisis justifying drastic action. Governments are pledging to "do something" (how specific) to discourage excessive risk-taking, keep up the stimulus spending, limit executive bonuses, impose tighter regulation of financial markets. Government must now be at the "centre of the economy" to avoid the boom and bust cycles of the past, say our dear global leaders.
The glaring omission from these grandiose statements is an acknowledgment that government action played a fundamental role in fuelling the boom in the US housing market that turned into a bubble in the wider mortgage market and finally burst across the globe. Successive US administrations mandated taxpayer-funded home loans to those who were clear credit nutcases. The US Government (doesn’t seem to matter if it’s Democratic or Republican, sadly) underwrote two-thirds of the US mortgage market using government creations, Fannie Mae and Freddie Mac, and, assuming a place at the centre of the economy to pursue well-meaning social goals, delivered poor, unintended consequences that largely triggered the global financial crisis. Barack Obama and Kevin Rudd are being ironic and dishonest when they exploit the crisis to demonise free markets. The Left has conveniently neglected to undertake an honest appraisal of the significant cause of the global meltdown.
Despite this fraudulent premise for social democracy, the Left’s cry of social justice is intuitively appealing to those who espouse intervention over personal responsibility. However, there is a reason why no one has been able to articulate the principles of social democracy. The language and rhetoric is deliberately emotional and ambiguous, and camouflages centralisation of power in the hands of a few elites who presume to know what the rest of society wants.
And we’re told the global financial crisis is (nearly) over? Yeah, right. Thanks to the economic illiteracy of Barack Obama (along with Kevin Rudd and Gordon Brown), prepare your children for GFC: Part II.