Letters to the Editor • Economy - Economics USA

Dear Wall Street Journal Letters Editor

Dear Wall Street Journal Letters Editor:
  With all due respect and humility, I beg to differ with the awesome intellect of Nobel economics laureate Gary S. Becker.  In comparing market failures with government failures, and in saying that the former are not as bad as the latter, he falls into the trap set by the left of equating banking with the free market.  The left's syllogism goes like this:  Banking wreaked havoc on the economy; banking is representative of the free market; therefore, the free market wreaked havoc on the economy.
  In reality, banking is a de facto franchise of the government, and, more specifically, of the government's strange and unaccountable creation, the Federal Reserve, which most certainly does not operate in a free market.  Banks are allowed to engage in fractional-reserve banking, to get funds at the discount window, and to loan and arbitrage the funds at a profit.  In return, they are highly regulated by not only the Fed but also by numerous regulatory agencies. 
This is very different from selling shoes, beer, computers, newspapers, house cleaning, consulting advice, and thousands of other goods and services--most of which  do not require a franchise from the government.  And, unlike bank customers, the buyers of such goods and services are not protected by an agency similar to the Federal Deposit Insurance Corporation.   
Craig J. Cantoni
Scottsdale, Ariz.

1 Comments in Response to

Comment by Anonymously Yours
Entered on:

Well said my good man. When the money is not even free market derived and the central bank has monopolistic controls over the money supply, interest rates and loan underwriting, we are not even close to a free market economy. Crony Fascism my friend is a much better description.