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Epic failures

A little more than three months ago, the debate was raging over the $700 billion Paulson Plan. And while there was never any doubt that House and Senate Democrats would support the notion of handing over astronomical sums of money to anyone with a pulse, far too many conservatives in the media cast aside whatever shreds of principle remained to them after eight years of a disastrous Republican administration and encouraged the Republican Party to support what was a small step for a Treasury secretary and a huge leap for socialism in America.

Now that what was completely obvious has become undeniable, and the failure of the initial round of bailouts has bankers and politicians in both the United States and the United Kingdom scheming to concoct another one, it’s wise to go back and examine what observers in the media wrote the last time. For it is certain that those who were completely and utterly wrong about the Paulson Plan being a viable solution to the financial crisis cannot be considered to have any credibility on economic matters in the future, as “we had to do something” is not a defense that can be reasonably invoked by any thinking conservative.

When two of the conservative media’s best-known economists are so visibly on the wrong side of the socialism/freedom divide, it is time to rethink the conservative media. Fortunately, there were no shortage of right-wing voices vehemently opposed to the series of bailouts that is still ongoing, whose inherent skepticism about government intentions proved more precise than the expertises of the various Nobel Prize winners, economists, and professional commentators who endorsed the Paulson Plan.

As I have repeatedly written, the Keynesian and Monetarist economic models upon which the bailout was conceptually based are useless because they have been shown to be broken by economic history. They are little better than the failed Marxian model, even if they lack dependence upon anything so undeniably absurd as the Labor Theory of Value. Their flaws stem from the demonstrable fact that their base assumptions are incorrect, their statistics are unreliable, and predictions based upon them are consistently wrong.

But one need not be a historian or an economist to know that government interventions almost never provide results in accordance with their proclaimed intentions. Conservatives are not supposed to require relearning this lesson, given that it has been taught many, many times over the centuries. And conservatives would do well to keep the words of one chastened National Review editor in mind for the next time the politicians declare the existence of an emergency that absolutely, positively requires the American people to hand over yet more money, power and authority to them.