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Rationalization: Scary And All Too Present These Days

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Every now and then one reads an article that while trying to prove one thing proves the opposite. David Sirota's "Nationalization: It's Not Scary, It's All Around You" is a perfect example. He alleges that the examples of nationalization he gives are successful, but careful examination of them tells a different tale.

Starting with his citing of Paul Krugman, "He noted that the Federal Deposit Insurance Corporation has been nationalizing about two banks per week, and that the best way to save our financial system is to temporarily nationalize it." I hate to break this to the two of them, but the financial system is already nationalized. That's why we're in the mess we're in. As I wrote in "Confusion About Government at the Huffington Post":

The problem is & was the government. There has been no deregulation only a rewriting of the rules. The financial industry remains tightly controlled. Starting with the Basel Accords, FDIC, Office of the Comptroller of the Currency, Office of Thrift Supervision, & the Fed, they have created a government banking cartel. It was the Fed that pushed interest rates ridiculously low creating the money to be loaned in the first place. Then there is the Community Reinvestment Act which requires banks to make loans in low income areas. Fannie Mae & Freddy Mac pushed the sub prime loans too:

[link edited for length]

Putting it all together, it was the government, not some nonexistent free market, that created the present mess.

The effective nationalization of the financial industry has not served us well.

Moving on to utilities Mr. Sirota points out "45 million Americans rely on public power utilities for their electricity". He leaves out that the article he cites for that figure states that that is only "14 percent of the nation's electricity consumers". Privatization is what we're seeing in that industry. Maybe there are good reasons why most people prefer the private provision of electricity. The trend has been away from public utilities lately, they are becoming a thing of the past.


Mr. Sirota goes on to write about busses, trains, and the Post Office as examples of nationalization that we benefit from. When it comes to public transportation there's not much to compare it to in the US. This is not the case in Caracas, Venezuela were this author lived for seven years. Most bus service there is privately owned. One doesn't wait long for a microbus to have one on his way. While it's true that rates are regulated they are also low. Compare this to the government owned Metro and it's Metrobusses. They not only cost more they run less frequently.

Then there's the Post Office. Does Mr. Sirota mean the same Post Office that keeps raising it's rates while delivering less and less service? Enough said.

Now we arrive at one of he most ridiculous parts of the article, "Then there's the health care system, with Medicare creating a quasi-nationalization model, and the Veterans Administration providing a fully nationalized system." Has Mr. Sirota not heard that there's a healthcare crisis going on in this country? That the government's paying for it is going to bankrupt us in a few years? Citing healthcare as an example of a well run nationalized industry is truly akin to claiming that the moon is made of green cheese.

He then goes on to cite nationalization during the two world wars. The only thing I see is how this kind of war socialism makes empire building possible, not an argument in favor of his position but one against it.

Lastly, there's the Transportation Security Administration. If this is an example of a good nationalization we're doomed! These are the people who have let all manner of weapons past while making decent people throw away all kinds of harmless things. Oh, let's not forget how their warrantless searches and fines trample our Constitutional rights.

Mr. Sirota deserves credit for two things. He at least is not trying to claim that the government's nationalized system of education is working well. Nor is he claiming that the government roads are oh so good. By omission he is acknowledging their failure.

The left can't have it both ways. We either were in a period of laissez faire that lead to our problems or a period of government control that failed. Mr. Sirota unwittingly proved that it wasn't any free market that lead us into our present mess but the nationalization that's "all around us" that failed.

 

http://theinternationallibertarian.blogspot.com/

Darren Wolfe, otherwise known as The International Libertarian, is the former Eastern Vice Chair of the Libertarian Party of Pennsylvania. He grew up in Puerto Rico and lived in Venezuela for seven years, including the first year of Chavez' rule. (more...)
 
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