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Why Libertarianism is a Crock
by David Brook
http://www.huffingtonpost.com/daniel-brook/why-libertarianism-is-a-c_b_56124.html

Jonathan Swift couldn't have thought up a better satire. John Mackey, CEO of Whole Foods Market and avowed libertarian, just got caught exploiting imperfect market information and scheming to rip off consumers by building an organic food monopoly. Libertarians claim the market should be left alone to regulate itself, while progressives have long argued that investors need accurate information from companies about their finances and consumers need competition to get the best price. Apparently John Mackey is just the kind of nefarious businessman we need government to regulate.

As today's New York Times reports Mackey was caught posting on Yahoo Finance's bulleting board under a pseudonym pumping up Whole Foods' stock and blasting its rival Wild Oats Markets. (Not content just to trick potential investors, he even praised his own coiffure: "I like Mackey's haircut. I think he looks cute!" he wrote under the pseudonym Rahobed, a corruption of Deborah, his wife's name.) The posts were discovered during a Federal Trade Commission case stemming from Whole Foods' attempt to acquire Wild Oats.

The libertarian philosophy that Mackey champions argues that government should butt out and let markets do their thing. But without government regulation, à la this FTC hearing, consumers and investors don't have the information they need to make informed choices. All too often, people who appear to be impartial tout products they have financial ties to. At the Department of Education, officials pushed a private student loan company they held shares in. Henry Blodgett of Merrill Lynch infamously pumped stocks on CNBC not because he thought they were good buys (he famously described one in an in-house e-mail as "a piece of shit") but in order to get those companies to do more business with Merrill Lynch.

Companies are supposed to compete by providing the best product at the best price for consumers and a legally-earned profit for investors, but greed has a tendency to get in the way. The business world attracts people who love money, so we need to count the proverbial silverware when they leave the dinner party. Temptation is everywhere in corporate America and businesspeople often cut corners or pull the wool over the eyes of consumers and investors. This temptation only grows stronger when conservatives are in power, gutting government watchdog agencies. Without government regulations governing conflicts of interest we get bloggers like Rahobed and touts like Henry Blodgett. Without the kind of strict anti-trust regulation libertarians abhor, companies tend towards monopoly and consumers get screwed. As John Mackey told his board members, according to FTC filings, buying Wild Oats would help the company "avoid nasty price wars in Portland (both Oregon and Maine), Boulder, Nashville and several other cities which will harm our gross margins and profitability."

The irony of Mackey's outing is delicious indeed. But shouldn't be surprised when libertarians, who after all preach that greed is good, are shown to be so greedy. And we shouldn't buy their self-serving rhetoric about deregulation.