September 2008

Social Darwinism's metaphor is built in. Free markets should evolve and regulate themselves as nature does. While the corrections and adjustments may be brutal in the short term, they bring long term balance and stasis. Or so the metaphor goes.... The Milton Freedman, Chicago school, view is that government's role, it's only role, is to protect borders and enforce contracts. And even this week as walls are tumbling down the proponents of deregulation are holding fast to their positions.

I can't get out of my head the comments of Alan Hess on KUOW's weekday this week. towards the end of the interview things got heated (at least for host Steve Scher) when Hess asserted that the FDIC insurance on savings accounts was having a detrimental effect market's ability to adjust. Ironically this claim was made at the same time that news the Primary Reserve Fund was scrambling to stall redemptions in what was quite clearly a run on the uninsured fund.