Some of us saw this coming. Those of us who saw "trickle-down economics" for what it was, a colossal scam designed to funnel money from the have-nots to the haves. Those of us who realized that the price of goods could not continue to skyrocket out of control without a corresponding spike in wages. Those of us who saw that the housing bubble was just that, a bubble, brought on by absurdly low interest rates and a borderline-criminal group of marketers convincing people that (1) rates will always be this low, (2) the market will always be hot, and (3) credit is just as good as hard money.

I am a former Objectivist turned into a borderline market socialist, and I guess it really is the converts who are the most vocally opposed to their former beliefs. I have been wondering for five or six years when the crash would hit, the one that would destroy the cult of deregulation and voodoo economics. I have to admit, I wasn't expecting it to hit this soon, but I knew it was coming at some point.

For years and years now, the economy has not been "free" in any sense of the word, and it never will be that pipe-dream ideal that exists only in books. The reason for that is very simple -- it is run by human beings. Human beings are greedy, self-centered, and most of us (whether we admit it or not) would cheat in some way in order to put ourselves ahead of someone else. If the law is a hurdle to something we want, and it won't be enforced, we don't observe it. You see this every day on the highways! In business, if some people will play fair and operate ethically, but others won't, and it is cheaper to be a bad guy, then guess who gets ahead? The bad guys, of course.

If one company keeps jobs in a country with decent labor and environmental laws, and a competitor sends them to China or India, guess who is able to sell a cheaper product? And if businesses in general keep employees' wages obscenely low, then they are interfering with one finger of the "invisible hand," the ability of the consumer to choose. That ability is supposed to be a critical gear in the perpetual motion machine that does not exist, the perfect unregulated free market, but if the market is left to its own devices, it will gradually eliminate the ability of the consumer to choose. You have more and more power concentrated in fewer hands, and that's what an unethical individual does with power. It is not a level playing field at that point. That is a nice scheme, keeping people unable to pay for anything except products made by what is effectively slave labor.

The ugly fact is that a perfect, ethical, golden "free market" is something that cannot exist. Because human beings are not nice or ethical, or at the least, many of the human race are not nice or ethical, that gives the bad guys an inherent advantage over the good guys. As long as there is no regulation or no enforcement of regulation, they will come out on top -- provided there is some source of cash flow.

Because there is the "safety mechanism" of unregulated capitalism. Such as it is. If you set up a system that rewards greed rather than ethics, cheapness rather than quality, eventually you bankrupt the consumer. That is exactly what we are seeing with the credit crisis. The predatory banks, those that sold people bad mortgages, are in big trouble -- those that are still afloat at all. The unfortunate thing about this "safety mechanism," and the reason why it isn't really safe at all, is because of what I said earlier -- the end result of deregulation is not more competition; it's more power concentrated in the hands of fewer people, and those people are more likely to be unethical because of the fact that it was an unregulated system, a system that rewards bad behavior. When the bad guys finally get theirs, they have become so powerful that their failure could take down the entire system.