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A commentator on Fox News said that the banks should not stop the foreclosure process because that would not be good for the free market. He said that people who cannot afford their houses should lose them. He was apparently unaware that putting a large number of houses on the market would cause home values to decline further, and that the market mechanism itself had been part of the problem in the financial crisis of 2008.  Protecting the free market is not our goal, yet he took it as the assumed telos, or final end. Lest it not be obvious he was also displaying a blatant disregard for the suffering of others. The possibility of people going homeless is apparently not of concern to the market advocates whose only concern is the market itself—a mechanism that Alan Greenspan has admitted contains structural flaws.

On another day, I heard another commentator on Fox News say that too much government in the financial sector is “the problem,” I was dumbfounded because one of the lessons of the financial crisis…wherein the global financial system almost collapsed…has been that the market and its firms can actually increase volatility from unregulated bubbles (and fraud).  To say that too much government caused the crisis has is completely opposite!  To be sure, Freddie Mac and Fannie Mae contributed to the problem, but the source was that the private-sector bankers wrote unsustainable sub-prime mortgages and sold them to private investment bankers who turned them into securities (which were then rated by private rating companies…some as AAA!).  To say that “too much government” in the economy was the cause is to warp reality to one’s own ideology.  That is to say, ideology can be amazingly resistant to change in the face of the facts on the ground. That the Republicans are doing well at all in the wake of the crisis, given their deregulation platform (and that government is the problem, not business), is remarkable except for the fact that we averted crisis.  Had Democrats on the Hill refused to save the banks (though they should have been just as interested in saving troubled home-owners!), the financial system would have collapsed.  The commercial paper market had already frozen. To be sure, the aid should come with the requirement that exec compensation would be limited (the banks should have been deemed legally bankrupt but for the government bailout and thus their exec comp contracts declared null and void), and strict anti-foreclosure rules set.  That these things didn’t happen attests to the power of even a complicit industry’s lobby in Washington. Had the financial system tanked, I bet the pro-business republicans would be facing a 1932-like Democratic landslide.  Ironically, the Democrats’ averting a disaster in which banks were complicit has benefited the Republican party, which is avidly pro-business and anti-government even in the wake of what Alan Greenspan admitted to be a flaw in the market mechanism itself (concerning volatility and bubbles—irrational exuberance). What amazes me is that such an admission is lost on an ideology that remarkably still have staying power.  That the Republicans are able to avert losing seats in Congress suggests to me how strong that party is. Ultimately, the lessons from the financial crisis of 2008 would…one would think…seep into the Republican platform to moderate it, just as Alan Greenspan (former Federal Reserve Chair) has recognized that his paradigm contains a fatal flaw.  In other words, I would expect that how we would look at the market mechanism itself (including private enterprise and commodities) would change following the crisis.  Perhaps one of the lessons from the midterm elections of 2010 is that this might not happen, at least for awhile.