By DAVID MOON, Moon Capital Management, LLC
July 11, 2010
A couple of months ago, my wife and kids surprised me with two new kittens. I was already feeding two cats, two dogs and sundry other wild animals, in addition to my children. I was not amused.
Last weekend, we finally tried to introduce the new cats to my normally docile dogs. Think Duke on the Beverly Hillbillies show.
A kitten hissed at one of the dogs and took a swipe at her. The dog barked. Within a flash, fur was flying, kids were screaming and I was in the middle of what seemed like a coyote fight.
For the record, everyone survived and is fine.
My kids and wife were mad at the dogs. I had to explain that it is the nature of dogs to fight, especially with cats. They could get mad at me, but they should not get angry at dogs for behaving like dogs.
It is the same lesson that the critics of capitalism and free markets need to hear right now.
Recessions happen. Unemployment is cyclical. The longer you postpone the inevitable yin and yang between growth and contraction, the worse are the recessions.
Until this current one, our most recent real recession dates back to 1982. That’s a lot of yin.
Some people believe that anyone who has more than they do could have only accumulated that wealth illegitimately. They abhor capitalism and genuinely free markets. They believe that it is the nature of man to lie, cheat, and steal – and that the ridiculously large compensation of many executives and Wall Street traders proves their point.
This isn’t true. It is only the nature of some men to lie, cheat and steal – and only then when they are in a negative state.
Self-proclaimed enlightened intellectuals can act holier than thou and blame free markets for “destroying billions of dollars in wealth and millions of jobs.” If so, they also have to credit US capitalism for allowing the creation of trillions of dollars in wealth and hundreds of millions of jobs.
Recessions and their ugly realities exist in all economies. So do greed and corruption. You don’t like the fact that Goldman Sachs paid $16 billon in bonuses this year while receiving both direct and indirect government handouts?
Neither do I, but you are terribly naive if you don’t think that it’s worse in France, Venezuela or Germany.
In his new book, “The End of the Free Market,” Ian Bremmer discusses a worldwide movement toward what he calls “state capitalism.” Now there’s an oxymoron worthy of a George Carlin joke. You want some “state capitalism?” Look at the current Russian economic system. It makes Enron look downright angelic by comparison.
Maybe I shouldn’t have allowed my dogs and cats to get near one another. That’s fair. That’s a failure of the regulator (me,) not the dogs or cats. Despite the best efforts of well intentioned people, sometimes regulations fail.
And sometimes the regulators are in collusion with the dogs.
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).