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Laissez Faire to Blame?

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With his column in Wednesday’s Washington Post [2], Harold Meyerson joined the chorus of pundits chanting that the turmoil in credit markets signals “the collapse of laissez faire.”

Webster’s Revised Unabridged Dictionary [3] defines “laissez faire” as

Noninterference; — an axiom of some political economists, deprecating interference of government by attempts to foster or regulate commerce, manufactures, etc., by bounty or by restriction.

No one who examines the American economy in general, or credit markets in particular [4], can truthfully conclude that laissez faire has reigned in recent years.  Indeed, were Mr. Meyerson to read George Will’s column [5] appearing beside his own in that same edition of the Post, he’d get a partial list of the many government interventions that have paved the path to this crisis.

To blame laissez faire for today’s economic crisis is akin to blaming the human body’s natural and normal functioning for the illness suffered by someone who’s overdosing on heroin.

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