The weak link in the chain

A tidbit I saw at Cafe Hayek helps answer a couple of vexing questions: Why does the left hammer away so relentlessly at large corporations? And why are the latter so quick to “cave” in response to demands?

A major reason is that capitalists don’t like capitalism:

Capitalists tend not to like capitalism. Milton Friedman pointed this out long ago. Too much competition. Too much risk. Much better to have the government keep out competitors and subsidize losses. Floyd Norris at the New York Times has just discovered this in an article called “Capitalists Who Fear Free Markets” (HT: Catherine Rampell)…

The quoted article from the Times cites as an example the corporate executives who became “outraged when a Japanese government official suggested that banks might have to take losses on loans to the company that produced a nuclear catastrophe.”

Hey we’re just the banks and we’re just doing our job! The government should bail us out man! Ditto the banks holding worthless mortgages that either aren’t worth foreclosing or can’t be foreclosed because the proper paperwork is lost.

And of course, in many cases they can honestly claim that “the gummint made us do it!” Regulations are passed (for example, requiring banks to lend huge sums to unqualified buyers of overpriced homes with no money down), and then WTSHTF, the banks have a colorable claim to be morally indignant.

Want to sell a new product? Have a problem because people aren’t buying your product? Get the government safety Nazis to outlaw the previous versions as dangerous, thereby forcing people to buy it. And if it turns out to be just as dangerous or more dangerous than the old one, you’ll be in a great position to demand that the government bail you out!

Never mind that it’s the taxpayers who do the bailing out. The taxpayers must be made to consume more of what the government says, and pay for both the costs of their own consumption as well as for the costs of the endlessly expanding regulatory network that forces them to consume. Buy that new mercury-contaminated lightbulb because the government says you have to! Replace that perfectly good propane tank because the government declared your old one dangerous! Buy that new child seat because the government says your old one is illegal! That round door knob you might think is perfectly good constitutes illegal discrimination under the ADA! YOU VILL REPLACE IT! And don’t imagine that the government won’t decide (much to the delight of the manufacturers) that there will have to be replacements for the replacements.

Nothing like having a captive market.

From a business perspective, it beats the free market any day.

The right campaign contributions help get results too.