Capitalism works

Below is the start of this RCM article:

Calvin Coolidge once said, “If you see 10 troubles coming down the road, you can be sure that nine will run into the ditch before they reach you.” The 30th president’s words are particularly prescient in light of the regulatory fever sweeping Washington.

In the past week we’ve been treated to a Wall Street Journal headline titled “Ten Days That Changed Capitalism,” which seemingly heralded the end of the market-driven consensus that has mostly prevailed over the last twenty-five years, and just yesterday Treasury Secretary Henry Paulson rolled out a new financial regulation blueprint meant to “to improve the workings of our financial markets.”

To support the new regulatory mindset is to assume that economically-free countries, as opposed to those centrally planned, are frequently burdened with sclerotic growth and commercial failure. One would also have to take a giant intellectual leap backwards in the direction suggesting that government bodies free of the discipline wrought by the marketplace are somehow better suited to solve the problems before us. In truth, it is private interests, those that operate fully accountable to consumers and investors, who regularly adapt to all manner of changes in what is a highly fluid economy.

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