The "free-market" talk continues. But the fact of the matter is the number of people who believe in a free market system could probably fill just a football stadium. And there is probably only one person in our government who believes in a free market; and that is Ron Paul.

Briggs Armstrong proposes a new rule:

[N]eomercantilists, neoconservatives, and statists are no longer allowed to call themselves "free marketers." People who call themselves free marketers such as Bush, Paulson, Greenspan, and Bernanke are the primary threat capitalism faces. These false prophets of capitalism are the greatest friends that proponents of socialism have.

Mona Charen piles on also:

President Bush, along with a sloppy and incontinent Republican majority in Congress, managed the feat of discrediting free market economics without ever practicing it. It was the Republicans who passed the Medicare prescription drug bill, and the bloated farm bill, and the transportation pork. This disqualifies most Republicans from challenging the gigantic new trough feeding that is about to begin under the Democrats.

Yup. That's pretty much it.

What these men really believe in is a "convenient" market, not a free one. The only question being for whose convenience the market operates. In a good world, a market operates for two people, and for two people only: buyers and sellers. Third parties have no business interfering in the market, no business interfering in the exchange between buyers and sellers: it doesn't really concern them. (That is to say, for clarity's sake, that, at the point of its interference, this third party is acting as neither buyer nor seller, but rather as an agent, not an agent for either buyer or seller -- though it will pretend to be one or the other, or, worse, neutral -- but as an agent for itself, in pursuit of its own ends and employing whatever means necessary to advance its agenda over against either buyer or seller.) But the convenient market operates precisely to benefit people who are not participants in the market, third parties, parties who are not buying and selling but doing something completely different. Specifically, the convenient market operates for the convenience of politicians, who can parley every problem into a crisis which requires their benevolent -- and empty -- hands to fix.

It's not a free market. It's not a social market. It isn't market socialism. It's a political market. It serves the interests of politicians.

So, we get bail-outs and stimulus packages to get the economy going again -- supposedly. But can that really work? One wonders if these men really do know what they're doing. Do they even know what gets economic activity going? They act as if the only thing that needs to happen is that people just start borrowing and spending, and banks start lending. Just like that.

So far it doesn't seem to work:

"Lending Drops at Big U.S. Banks," reports the front page of the Wall Street Journal. Even those banks that have just received an infusion of $148 billion in taxpayer dollars as part of the TARP saw their loans drop by 1.4 percent between the third and fourth quarters of 2008, the paper reports. The economy seems to be shedding jobs like a dry fir tree losing needles. People speak of a "consensus" that only a huge stimulus plan by government can save us. ~ Mona Charen, here.

We've heard what some of these institutions are doing; and they do not seem to be lending. They seem to be buying jets and remodeling bathrooms. I don't think those are necessarily the best things to do with bail-out money, but at least some people had to build the plane and remodel the bathroom. And those two activities required prior stages of production, which is important because the little-known secret of economics as it relates to employment is this. The important thing is not full employment. The important things is full production. Production must precede consumption. (This is not a little-known secret if you buy into Austrian economic theory.)

So, it's really great (okay, not really) that all this bail-out money went out. But that's one thing. It's another thing to determine where it should go in the form of loans.

To whom is this money to be lent? Should it be lent for the purchase of capital goods, or consumer goods. If for capital goods, then it is to be lent for some type of production. Great. But what is to be produced? Unlike the auto industry, our masters on the Potamac seem not to have told us. (And when they do they will not determine investment by rational calculations in terms of money, but will be guided by political expediency, e.g., no construction jobs for white people, so Robert B. Reich.) It's difficult to see how banks are to be lending any money, or to whom. Normally, we could rely on entrepreneurs to make predictions about future consumption and appropriate capital goods successfully. But there is too much government interference in the market, and this interference sends signals to entrepreneurs about realities that don't really exist. This is what a "bubble" is. The housing bubble was created by our government, virtually by fiat. If I were an entrepreneur I would have no idea how to make any sort of forecast. I wouldn't know how many of the markers I'm looking at (like, for example interest rates) would be telling me the truth. Government manipulation of interest rates sends false signals to entrepreneurs about what people are doing with their money. It also sparks mis-allocation of goods and services, which is how we got into this mess. (And of, course, the name of the game for the political market is, blame the mis-allocators, not the ones who deceived the mis-allocators.)

Apparently, there's plenty of money for entrepreneurs to borrow. Normally that would mean people are saving, putting off present consumption in order to consume later. And here's the entrepreneurial question: When people do that put-off consumption, what will they be consuming?

But the fact is, while there is, arguably, plenty of money for entrepreneurs to borrow, we know that this money is not there because people are putting off present consumption. It's there because the government put it there, probably by just printing up money. This creates a further problem: inflation. By sending more paper money after a shrinking number of goods and services, the government causes inflation. So there's money there, sort of. But the money that is there now is fiat money and it's going to result in price increases. For what purposes is the entrepreneur to borrow? To produce something that is going to cost consumers more tomorrow than it does today?

So much for one type of borrowing, let's look at another. If this newly-available money is to be lent for consumer goods, then which consumer goods? iPhones? Blackberries? Tricorders? Better question: people are already debt-burdened due to borrowing for consumption goods in the first place. To listen to politicians, this consumer debt has been incurred because workers' dollars are buying less and less and they have resisted, if not flat out refused, to alter their standards of living. So they have had to borrow just to maintain a standard of living they can no longer afford. Are they to borrow still more money? Yes? And pay it off with what? Another loan?

Do these people really know what they're doing? They certainly don't give that impression. They throw money into the market and hope that it causes another boom. And it might do that. It's highly likely, though, that the next boom will just be another bubble, which will also burst, in time. It's the boom-bust cycle: it's always just a matter of time. The other game in the political market: make sure you've got a place to sit when the music stops.

That's the purpose of the political market, to provide politicians with future employment. They don't have to fix it. They just have to be the ones in power when it finishes fixing itself, assuming they don't screw it up beyond belief, first. Then they can, post hoc ergo propter hoc, take credit for fixing it and buy more votes. All they have to say is, "Hey, we implemented the PQR Stimulus policy and within two years the economy was healed." They don't have to demonstrate any causal relationship between the stimulus package and an economic turn-around. How many Americans could understand such an explanation, anyway? No, wait! How many Americans know enough even to ask for such an explanation?

All they have to do is position themselves in front of the avalanche and then stay ahead of it. Then, if they can keep moving faster than the avalanche is chasing them, they can claim the avalanche was simply following their leadership! All they have to do is keep moving. All they have to do is something, anything. It doesn't matter, because when the economy corrects, they'll say it was a result of their policies.