The Fire Hose
There's a fable of sorts that I remember being popular among the "new economy" evangelists several years ago. It was about some probably fictitious study of apes. The experiment began by keeping the apes away from a particular part of their cage by spraying all the apes with a fire hose whenever one of the apes approached the forbidden area. After a short while, the apes learned where not to go, and wouldn't venture near the offending zone. They would then release new apes into the cage, and when they tried to move about freely, the previous apes would forcibly constrain the newcomers to the safe areas, long after the scientists had left with their fire hoses.
The point of the story is supposed to be that there are all these old timers who are trying to enforce old rules of business that don't apply anymore. This story seemed somewhat relevant when the internet (and its accompanying economy) had the appearance of radically transforming everything as we knew it. But it seems to me that the radical deregulation crowd is continuing to apply this thinking to the economy as a whole long after it's become clear that things haven't changed all that much. Banking and financial regulations were imposed after the unchecked cycles of boom and bust reached catastrophic proportions in the thirties. Media regulations were imposed after the excesses of Hearst at home and the Fascists and Communists abroad. Virtually all the economic regulations that are now being repealed were imposed initially because our society got sick and tired of getting the fire hose. The radical Republicans are telling us that the scientists have left the room. But economics is a science, not a scientific experiment. Cause and effect are not determined arbitrarily, and does not change arbitrarily in the real world. We've got to hold the Republicans back or else we all get it with the hose.
Note: I was in a hurry when I posted this, and forgot to link to The Proud Tower over at Emphasis Added, which made me remember the fire hose story.
9:50:52 AM 
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