Ideologues neither die nor fade away

General Douglas McArthur famously uttered that "old soldiers never die, they just fade away." That may be true of old soldiers. But, old ideas do not seem to die nor do they fade away. They just hang around and cause additional misery for all of us. When the USSR was going strong, the defenders in the free world argued that the USSR was not representing the true ideals of socialism and communism. And now, we hear from the far right about how all this is not the fault of a free market--because, after all, what we have now is not a free market to begin with!

Of course, we do not have a free market--not when government accounts for almost a fifth of the economy. And not when we have significant government involvement in economic decision making.

But, come on, can't we at least accept that the market is imperfect? Oh yeah, even if some of them will say that in the softest of whispers, they immediately come back with a much louder, the most imperfect market will be more perfect than the most perfect government. Which, again, is ideological speak.

Jacob Weisberg writes that this financial crisis is the end of libertarianism. I say he is way too optimistic. But, he has some good points:

the libertarian apologetics fall wildly short of providing any convincing explanation for what went wrong. The argument as a whole is reminiscent of wearying dorm-room debates that took place circa 1989 about whether the fall of the Soviet bloc demonstrated the failure of communism. Academic Marxists were never going to be convinced that anything that happened in the real world could invalidate their belief system. Utopians of the right, libertarians are just as convinced that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along. .....

Like other ideologues, libertarians react to the world's failing to conform to their model by asking where the world went wrong. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster.