Posted in the Asia Times online Henry CK Liu writes The Crisis of Wealth Destruction. An excerpt:
Market fundamentalism places unwarranted faith in the mythical self-correcting power of unregulated markets driven solely by the no-holds-barred, winner-takes-all self-interest of unruly market participants risking other people’s money for private profit. It has also given birth to democratic fundamentalism, its political twin in capitalistic democracies.
This democratic fundamentalism, which places unwarranted faith in the wisdom of the majority popular vote on complex technical problems that most voters do not fully understand, has put an impossible demand on government to reduce the fiscal deficit while at the same time reducing taxes and increasing popular entitlement and defense expenditures. Democratic fundamentalism has rendered government in capitalistic democracies impotent in solving the fiscal crisis created by market fundamentalism.
Liu’s article is worth the read, but be prepared for his Keynesian tilt. The problem is not that the voters are incapable of understanding complex financial issues. The problem is the intelligent and the academics who thought they did. Either we accept that the world is too complex for the common man to understand and turn the reigns over to technocrats, or we realize that while few may understand the depth of critical issues they are capable of understanding the basic principles. We may not have a medical degree but we still select competent doctors.
It is unrealistic to expect the voters to comprehend complex financial instruments; but it is not unrealistic to select a candidate that does understand the issues and is able to communicate the substance well. The tea party may be a step in realizing that even the brightest can not suspend sound principles, but just because the problem was created by the intelligent does not mean that it can be solved by the ignorant. The leader we need and that will ultimately surface will be strong on both character and competence as opposed to mere charisma and eloquence.