Talking bull

"The central tenet of the New Economy faith was that the free market was the highest and most rewarding form of human existence, a notion that would have seemed transparently ideological had it not always been couched in the language of technology and in lofty phrases about the juggernaut of history and the will of the common man. The great management theorists of the 90s didn't dissect the corporation so much as propagandise for it. And the stock market gurus of the age, with their fond dreams of a nation of small shareholders, openly looked forward to the destruction of the New Deal regulatory state, to a time when the little people would identify more with the corporation than with the government...

Whatever happens, they argue, it cannot possibly be the fault of the market. Never mind the fact that one of the very measures taken by corporations in the 90s to ensure that market rationality prevailed - the granting of stock options to top executives - is the single greatest culprit in the present fiasco: markets never fail. Other parties, namely government, must be responsible. For yesterday's bubble-blowers, this is true in the way the law of gravity is true; it is axiomatic. "This is Washington's recession," glowered Larry Kudlow a little over a year ago, "for which nothing is more to blame than the arrogance of policy-makers who refused in the first place to recognise the real sources of prosperity and then refused to acknowledge that slumping stock markets were a referendum on Washington's mistakes." The only trick is finding the exact bit of misguided government meddling that triggered this vast disaster.

Over the last year, dozens of candidates have been unearthed and pushed forward, then abandoned out of self-evident absurdity. Kudlow, for example, blamed the anti-trust lawsuit against Microsoft. Gilder blamed anti-trust restrictions placed on WorldCom. Others got indignant about taxes, which are always too high since by definition they are equivalent to theft, or about New York's lawsuit against Merrill Lynch. With my own eyes, I once watched a TV show in which business reporters blamed government policy for tripping up the good people of Enron. It pleases elements in the Wall Street Journal to pin the crash on the country's remaining telecom regulations, while others bemoan the government's failure to subsidise "broadband" aggressively enough."


Once again, according to the faith of market fundamentalism, government is somehow mysteriously to blame for market failure.