1. The Export-Import Bank….But there is still the problem that doing this requires the government to consume capital, which might have created more jobs, (or just more wealth) if it had been allocated elsewhere. The onus is on the author to show that it does not: one cannot criticize on the basis of what might have been.
2. So this is classic corporatism: government allocating capital to private industry on the basis of political favoritism. Where is political favoritism here? As a nation we are interested in exports. As a nation, we hire a national agency --- the federal government --- to facilitate that. What's political about that?
3. Agricultural price-supports. Contrary to myth, most of the money goes to agribusiness, not small farmers. See the comment on the public goods below.
4. Industrial bailouts, like the recent one of the airlines. Ridiculous: this was essentially a wartime measure.
this country has more carriers than the market can support and a few should be allowed to die. Of course, but not at the time of national crisis. Very disingenuous argument here.
No-one who really believes in free-market economics accepts the argument that jobs can be saved in the long run in this fashion. Again dishonest: this was a bailout at a time of national crisis. No one argued that the inefficient airlines are going to be maintained.
5.Corporate bankruptcy law. This law assigns an artificial value, not supported by economics, to keeping dying companies alive, Again false: in court proceedings, experts are called to evaluate these matters.
6. Tariffs, quotas, and other trade restrictions. These transfer wealth from consumers to producers in the affected industries, whatever their other possible merits. The goal here is precisely to take these "other merits" into account. What's so negative or unusual here? One always judges alternatives by the bottom line, not the individual components.
7. Affirmative action is generally viewed as a social-policy question rather than an economic-policy one, but it fits neatly into the corporatist model: government forces private industry to distribute jobs to a favored political constituency. Again, what is political here? Did not Republicans support this measure as well?
8. If people really believed in markets, they would realize that irrational discrimination imposes a cost on employers, who therefore already have an incentive not to engage in it. Well, so does the lack of discrimination in housing; so does the whole bunch of labor laws (like paying for overtime). This is why we moved away from the robber baron days.
9. Fannie Mae, the government agency which raises money for mortgage loans in the private capital markets. This agency has deliberately been spinning out loans to sub-par borrowers who are doomed to default on them. Evidence, please, and specifics.
10. It has become a major prop holding up real-estate prices, and is thus a key culprit in the ongoing mortgage bubble. Fannie Mae existed also when there was no bubble. This statement violates the basic premises of causal reasoning.
11. Conservatives accept it on the grounds that home ownership makes people more conservative. But this may not be true forever Again, argues against ghosts here.
12. Sallie Mae, the government agency which supervises student loans. The government has a system of directly-financed public universities False, some universities are financed by the respective state governments. The government does not have such a system.
but is has also in effect annexed private universities. Cleverly, it uses a relatively small amount of public money to package the flow of a much larger amount of private capital to tuition. What on earth does this mean? Any specifics?
The principal problem with this is that it has become a subsidy machine for the spiraling cost of higher education. SO what's wrong with that?
13. There is also the problem that any institution receiving federal funds becomes susceptible to regulations that otherwise wouldn't be legal. Any examples? Pure demagogue.
14. In local government, corporatism is principally a matter of real estate. Let's take New York as an example, No, New York is not an example of anything; it is a complete idiosyncrasy.
15. In science and technology, corporatism principally takes the form of federal government financing of research expenditures whose value is difficult for the private sector to capture on its own. Wrong. It is not a question of difficulty: private sector has no incentives to invest in fundamental research.
In the capital markets, the quintessential corporatist institution is the Federal Reserve Bank…the responsibilities of the Fed have tended to grow as people expect it, for example, to bail out a falling stock market with cheap credit.. Well, if our increasingly uneducated and ignorant population expects this, it does not follow that the Fed actually act. To the contrary, Greenspan repeatedly said on Capitol Hill, "The Fed looks at the economy, of which the behavior of the stock market is only a small part."
Bankers are quite well aware that they can make speculative loans to financially weak nations So why don't they make loans to these nations exclusively?
The author would be well advised to learn the simple fact that there is a whole host of goods that the markets do not provide. For provision of these, so-called public, goods the coercive power is needed. If he wants to complain about the government, he should at least explain to us what the alternative is: the markets do not necessarily constitute such.
More importantly, it would be nice if he at least advanced arguments, but he regurgitates propaganda instead. A mini reincarnation of Pat Buchanan: smart-sounding words with not much meaning and a lot of distortion behind them.