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Op-Ed: Capitalism Placed on Double Secret Probation


What Animal House can teach us about the economy.

Editor's Note: Matthew Beller is a former employee of the Federal Reserve Board and the Securities and Exchange Commission. He currently works for a private investment firm in Los Angeles.

Since the middle of 2007, government has made one massive financial intervention after another in an attempt to prop up the flagging economy. Supposedly, capitalism's hedonistic excesses caused an unsustainable boom that only benevolent politicians have the ability to remedy.

Such assertions might get by without any debate during the Age of Self-Evidence, but it's disappointing that capitalism was never even afforded a Pan-Hellenic Disciplinary Council hearing, like the one in the movie Animal House that was used to railroad the lovable Deltas.

If there had been such a hearing, we might have at least gotten to hear a defense similar to the one given by Eric "Otter" Stratton, perhaps presented by a Wall Street executive:

Ladies and gentlemen, I'll be brief. The issue here is not whether we broke a few rules or took a few liberties with derivative securities - we did. (Wink). But you can't hold all of Wall Street responsible for the behavior of a few individual companies.

If you do, then shouldn't we blame the whole financial system? And if the whole financial system is guilty, then isn't this an indictment of our legal institutions in general? I put it to you: Isn't this an indictment of our entire American society?

Well, you can do what you want to us, but we're not going to sit here and listen to you badmouth the United States of America! Gentlemen!

Unfortunately, we never got to hear such inspiring words, and government is doing exactly what Otter argued against. It is punishing everyone for the poor business decisions made by a few. By handing out bailouts and running massive fiscal deficits, it is we taxpayers and future generations who are being held responsible for others' mistakes.
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