Where It Is Easier to Mine Gold

Because it is so apropos today, this is from David Cay Johnston’s Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill), published by Penguin in 2007, pp. 6-8:

Among the father of capitalism’s [Adam Smith’s] lesser known but equally significant insights is what he wrote about the eagerness of business owners to make even more profits by thwarting the invisible hand. He warned that unchecked self-interest, especially when aided by the government, will spoil the benefits of capitalism….

Thoughout his writings Smith warned of the damage done when government interferes in the market by guaranteeing profits or handing out gifts. This damage can exceed that caused when government taxes unwisely or imposes rules that needlessly obstruct commerce.

It is a universal truth that it is easier to mine gold from the government treasury than the side of a mountain.…

The harsh reality is that for the past quarter century, policies adopted in the name of Adam Smith, policies that supposedly strengthen the invisible hand guiding the market, have weighed down our economy while simultaneously stuffing the pockets of those among the rich and powerful who solicited them or… were just standing in the right place at a lucrative time. This is our story, not of one free lunch, but of the many banquets at which billions and billions of your dollars are being served to the richest among us.

Of course, with the Wall Street bailout, "billions and billions" is now adding up to a trillion or two. Almost as much as the cost of the Iraq war. Hat tip to big sister Debbie for giving me the book.