Truth and Narrative
By Arnold Kling
Consider two propositions:
1. Market failure is inevitable.
2. Government failure is inevitable.
In talking about the financial crisis, I believe that to speak the truth one has to accept both propositions. Most people prefer narrative, which either explicitly or implicitly denies one or the other. Those who deny the inevitability of market failure want to pin everything on the Community Reinvestment Act or somesuch. Those who deny the inevitability of government failure want to say that, yes, government failed, but that was because Bush was President, or (if we go back to Clinton) the ideology of free markets and deregulation was at fault.
For those who deny that government failure is inevitable, I am wondering what the narrative is for the “rescue plan” that Congress passed in September.
(a) You believe that it is succeeding, proving that government failure is not inevitable. If so, please list the signs of success that I should find comforting.
(b) You believe that team Obama has a much better plan that they are keeping secret for now. If so, any guesses as to who has the plan or what it might contain?
My interpretation of recent events is that government has seized a huge chunk of our wealth and enormous increments of power. Unless that in and of itself makes you happy, this is just another instance of government failure.