Left-wing economic journalist Ross Gittins has just discovered the word “libertarian” and he’s not happy. Of course, he hasn’t yet discovered what it means, but he’s fairly sure it means something scary and bad.
As is standard for a paleo-Keynesian, Gittins is sure that regulation and activist fiscal policy are good things. He simply asserts that the recent recession proves his case. He doesn’t rebut the overwhelming evidence for partial ricardian equivalence… he doesn’t rebut the undeniable fact that internationally financed debt must be 100% crowded out through lower net exports (indeed, like most Keynesians, he probably doesn’t understand this point)… and he doesn’t rebut the likelihood that domestically financed debt will also involve some crowding out.
For thinking people, it is basically a fact that activist fiscal policy has little impact on the size of the economy, and is likely to be a net negative. But Gittins sees no need for rational discussion of the facts. Instead, he has written a grossly dishonest string of insults against ideas that he doesn’t understand.
He describes the libertarian position as “extreme … nonsense … delusions … discredited … naive nonsense … based on faith [not] empirical evidence … impervious to the destruction they helped to cause … prejudice”, and goes on to suggest that libertarians are in the pay of evil rich men. Strong words for a guy scared of intellectual debate.
Strangely, Gittins complains about the financial bail-outs, then endorses the bail-outs (bringing us back from the “edge of the abyss”), then blames libertarians for the bail-outs despite the fact that libertarians were nearly the only group that opposed them.
In a comment that reveals him either to be hopelessly ignorant or an irredeemable liar, he describes the libertarian position as “markets are without fault”. Of course, he can’t show any libertarian ever saying that, because it is simply not true. Libertarians do think that markets work relatively well, but there is no such thing as a perfect market because we don’t have perfect people with perfect information. Likewise, there is no such thing as perfect government because we don’t have perfect politicians with perfect information. Indeed, central planners face a bigger information problem and worse incentives.
Gittins then tries to attack the “government failure” meme for the recent recession. Of course, he doesn’t provide an argument. That would be too stressful. He waves his hands, and suddenly the regulation that encouraged excessive home ownership & high-risk loans, and the low interest rates following the dot-com bust, just disappear as issues. I wanted to write a rebuttal, but he actually made no coherent points.
Amusingly, Gittins is proud that he doesn’t understand how speculation works. The point is simple… if a speculators generally “buy high, sell low” then they wouldn’t be in business for long. It is the “buy low, sell high” strategy that generally works better… and that is counter-cyclical by definition. Gittins doesn’t understand this, and is proud of his ignorance. Of course, he offers no argument on this point either.
After insisting that libertarians have mostly been ignored, he then insists that we have “browbeaten too many” into our evil plot for world domination and caused the crisis, and then he insists that we have been ignored after all. If you’re confused, don’t worry, so is Gittins.