A lot was and is again being made of Alexander Haig's declaration on 30 March 1981, when the President was shot and rushed to hospital, I'm in charge here. Frankly, I think that his remark at that time was willfully misinterpretted by various hostile parties. On the other hand, I remain disgusted by something that Haig said just twelve days earlier, on 18 March.

In 1980, El Salvador was caught-up in civil war, with the United States supporting the Salvadoran state against left-wing insurgents. On 2 December, four American church-women (a lay missionary and three nuns) were beaten, raped, and murdered by members of the Salvadoran National Guard.

As these events were being uncovered, Haig was called before the Foreign Affairs Committee of the United States House of Representatives. Haig told the Committee

I'd like to suggest to you that some of the investigation would lead one to believe that perhaps the vehicles the nuns were riding in may have tried to run a roadblock, or was accidentally perceived to have been running a roadblock and there may have been an exchange of gunfire and perhaps those who inflicted the casualities may have tried to cover it up, and this could have been at a very low level of both competence and motivation in the context of the issue itself.

(Underscore mine.) By referring to an exchange of gun-fire, Haig tried to creäte an impression that these women had tried to shoot it out with the National Guard.

Haig went to his grave mocked for attempting to tell the nation that the White House was under active leadership while the President was incapacitated and the Vice President was in-transit. Haig faced minimal consequences for having attempted to depict four unarmed victims of torture and murder as guerillas who had simply died a gun-fight.

Consider two propositions:

• The first is that markets are smart, to the extent that they cannot be tricked into anything unless one carefully hides most or all of the contrary evidence.
• The second is that, left unregulated, markets produce some best possible outcomes.

These aren't at all the same proposition. On the one hand, something can be hard to deceive, yet work at purposes contrary to those that one favors. On the other hand, a mechanism can be vulnerable to some sorts of disruption but, in the absence of that disruption, perform some task well. I'm not saying that the propositions are contrary; they could be simultaneously true; none-the-less, they're plainly not identical.

The run-up to the latest economic crisis seems to have been founded in no small part by a confusion of these two distinct propositions. The Bush Administration represented itself — and may well have considered itself — free market, in-so-far as it expected considerable resilience on the part of the market in the face of remarkable levels of state borrowing and considerable other interventions (compassionately conservative or kleptocratic). And Alan Greenspan, who surely considered himself a believer in laissez faire, is these days explaining his optimistic proclamations from before the crisis as stemming from a failure to reälize that investors would not recognize that a boom could not last forever, to which lack of recognition he also attributes the crisis, as if irrational exuberance were simply a Keynesian animal spirit, rather than a product of things such as lending regulations and Federal Reserve interest rate policy.

Meanwhile, many of the Keynesians, socialists, and pragmatic technocrats (long-standing or born-again) are arguing that the fact that the market could be fooled shows that markets aren't clever and that thus various sorts of interventions are needed, as if any defense of free markets must hang upon a belief that markets are simply too clever to be fooled. Left unaddressed is whether the confusion were endogenous or brought on by state intervention, whether those prior interventions that may have been the cause of the confusion produce actual benefits worth the costs of that confusion, and whether more intervention would produce a more clever system or a less clever system.

In fact, there are various long-established free-market schools of thought that attribute economic crises to a propensity of state intervention to fool economic participants. For example, it is difficult to distinguish to what extent interest rates reflect the supply and demand of private savings for future consumption, and to what extent they are an artefact of central bank intervention for other purposes. In the face of Federal Reserve manipulation of interest rates, the market will not be sufficiently smart to see what the price of loanable funds should be, and therefore will almost certainly build too much or too little for the future.

Joe Wilson has behaved like a d_mn'd fool, and there's not much reason to expect him to stop behaving like a d_mn'd fool, but he's being offered a Golden Opportunity:

A clever politician would agree that such an apology were required, and then proceed to deliver something that were indeed an expression of regret, and impossible to fault on technical grounds, but that wrapped an explanation of Wilson's ostensible concerns. The apology could be formally very polite and yet a strong declaration of belief in opposition to the President's programmes. Listeners at all inclined to sympathy for Mr Wilson or to anxieties about the President would have that sympathy or those anxieties greatly reïnforced.

Were I a Democrat then, while I'd generally bet on Wilson's continued foolishness, I wouldn't take this particular bet. The chance of losing is quite low, but the loss would be far too great.

When you read or hear some writer or speaker — especially a journalist or a politician — asserting

Economists say X.

ask yourself two questions:

• Is this all economists or most economists or just some economists?
• Why has this writer or speaker chosen not to specify whether it is some, most, or all?

The same point applies to other areas of expertise. A bald climatologists or scientists or health experts or historians or philosophers should get one to ask the analogous questions. But, right now, I am provoked by yet another article about what economists say.

(Underscore mine.)