Conspiracy or collapse

Gary North favors the latter thesis:

The senior rulers of the United States — I do not mean politicians — have watched in horror as institutions that had survived since the mid-19th century went down: investment banks. These were banks that did not take deposits from the general public. They pooled large quantities of capital from private, wealthy investors. Within a matter of weeks, that business model collapsed. The investment banks scrambled to restructure their legal operations so as to be defined as commercial banks and therefore become eligible for the federal bailout money. Meanwhile, huge commercial banks almost went bankrupt. They did not go bankrupt only because of government intervention and because larger banks absorbed them. Wachovia went down. Washington Mutual went down. The share prices of the two largest banks in the United States, Bank of America and Citigroup, are still close to penny-share status.

Anyone who does not understand the magnitude of what is taking place is an economic ignoramus. I have plenty of these ignoramuses contacting me, telling me it was all planned by the insiders. The conspiracy has won again! In their worldview, the conspiracy always wins. That is because they believe that the conspiracy has the attributes of God. It is omniscient, omnipotent, and omnipresent.

Here is their intellectual problem: they do not believe in the free market. They cannot conceive of a social institution based on voluntarism that can break the backs of government planners and central bankers. They will believe anything but this. They think of themselves as defenders of the free market, but they do not grasp the power of the free market to enforce consumers’ decisions.

The conspiracy of well-placed insiders is now tottering. The whole structure of the national American political system has rested on the solvency of the largest American banks. These banks have all been called into question. They are now gutted.

The thought that commercial-bank insiders actively demolished trillions of dollars of their own equity as part of a conspiratorial plan is so imbecilic, so outrageous, so ludicrous that I am convinced that these conspiracy worshippers have lost whatever remained of their minds.

I’m sympathetic to North’s view here, but one thing that history also teaches is that there is not one massive conspiracy weaving itself throughout the governments of Man. Instead, there are dozens of conspiracies, scores of seen and unseen alliances that merge and diverge according to the momentary circumstances. I have no doubt that the present rulers of the USA are in disarray, but I also have no doubt that there are others who foresaw this situation, perhaps even helped bring it about, and at the very least will attempt to take advantage of it. It’s certainly interesting to see how quiet the global governance lobbyists so noisy back around the turn of the century have fallen….

Of course, it’s becoming increasingly hard for anyone to seriously argue that the principles of continuing globalization are going to bring about a higher standard of living for anyone anymore. Which presumably leaves them with little more than the fake science of global warming to justify continued centralization. Anyhow, I don’t think it’s necessarily the binary situation that Mr. North posits here.