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InsiderOnline Blog: June 2011

We’ve Read this Novel Before

The spectacle of waivers to Obamacare regulations, dispensed by criteria known only to bureaucrats so that some may keep health insurance that’s limited and therefore affordable, reminds Dan Mitchell of this passage from a certain work of fiction:

Nobody professed to understand the question of the frozen railroad bonds, perhaps, because everybody understood it too well. At first, there had been signs of a panic among the bondholders and of a dangerous indignation among the public. Then, Wesley Mouch had issued another directive, which ruled that people could get their bonds “defrozen” upon a plea of “essential need”: the government would purchase the bonds, if it found proof of the need satisfactory. There were three questions that no one answered or asked: “What constituted proof?” “What constituted need?” “Essential—to whom?” … One was not supposed to speak about the men who, having been refused, sold their bonds for one-third of the value to other men who possessed needs which, miraculously, made thirty-three frozen cents melt into a whole dollar, or about a new profession practiced by bright young boys just out of college, who called themselves “defreezers” and offered their services “to help you draft your application in the proper modern terms.” The boys had friends in Washington.

That’s from Atlas Shrugged, Ayn Rand’s 1957 novel about what happens when the wealth creators of the world decide to withdraw their entrepreneurial efforts—“go on strike”—because they are tired of the moochers using government to live at their expense. As the number of pages of federal regulation has reached an all-time high, capital appears to be on strike today, too. Corporate cash reserves are unusually high, at $1.91 trillion, according to the Federal Reserve. That’s $1.91 trillion businesses have chosen not to invest.

Posted on 06/13/11 04:05 PM by Alex Adrianson

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