by Ignacio Gutierrez

Created on: October 27, 2008

We, the people, are the market. Not OPEC, the Dow, Goldman Sachs, or much less the Federal Reserve. The market is you and I with our dollars in our hands. It's third graders spending their allowance on a favorite soda, let alone hassling their parents to purchase the latest X-Box game. Anyone buying anything they need or want is a more accurate representation of the market, and much more significant in determining value than any broker on the NYSE trading floor.

There's no "invisible hand" driving the markets. They're not an abstract theory. They're the real and inevitable confluence of our creating, buying, selling or trading of goods and/or services within various industries or demographics which we all comprise at different times. It's difficult for many to comprehend how the chaotic nature of economic liberty, ie free markets, creates the most opportunities and abundance from scarcity.

Free markets are infinitely more efficient than controlled economies such as Cuba's, where rationing may be deemed ethical and just, but it's results are disastrous. Take for example, asthma inhalers . Sure, they're 5 cents. Because you're only allowed one per month, which you still need to pay for. If you need more, as most asthmatics do, the only option is buying them on the black market for practically one month's wage. Or having family send it from abroad. Which begs the question, how is it possible that in a controlled economy, there are just as many, if not more asthma inhalers in the "black market" as there would be in the neighborhood pharmacies? Just a minor detail Michael Moore failed to mention in Sicko.

Which is why it's dumbfounding to now hear Alan Greenspan speak of the "flaw" in his free market ideology and how he must re-examine it. "I still don't understand exactly how it happened" he's stated. Fortunately, some economic experts do.

Even those who supported Greenspan admit his two greatest mistakes were lowering interest rates dangerously low, thus creating "easy money", and his encouraging people to take Adjustable Rate Mortgages during the ensuing real estate boom. Ultimately, it was creative financing coupled with derivative formulas and exotic securitization schemes concocted by investment firms and hedge funds which sold "securitized" mortgage packages from banks to financial institutions around the world, all based on credit and speculation, that are the true culprits behind this global financial crisis, not free markets.

It would behoove Greenspan to make a clear distinction between the abuse and exploitation of credit and the right for people to buy, sell, earn a profit, and ultimately own property within the "free market". If anything, Greenspan's biggest mistake now is providing fodder for the Michael Moores and the Naomi Kleins who will preach socialism is the answer and belittle the average Joe they purportedly represent, especially if he's a plumber who dares question the proven failure that is the forcible redistribution of wealth which hardly benefits we, the people, in the long run.

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