Todays financial crisis
So, we find ourselves in the middle of the worst financial crisis since the Great Depression.
At least, that’s what Hussein Obama, politicians and the mainstream media are telling us.
Could it be in fact a self-fulfilling prophecy?
Since the fall of 2008, as the stock market plummeted, companies and banks folded and millions were put out of work. Americans have been bombarded with this refrain about the failure of the free market economy.
If we’re not quite in that much trouble yet we’re bound to be soon once those same politicians have rolled up their sleeves and done their best to "fix things" by engaging in the worst case of socialistic experimentation since the Great Depression and Roosevelt’s New Deal.
How did we get into this mess anyway?
Most everyone points to the crash of the housing market.
Why did it collapse?
Was it a failure of the free market and the greed of unregulated businessmen?
If you read my thoughts on "Understanding the Financial Crisis" you would know I do not think so.
Anyway, what’s so unusual about greedy businessmen?
They’ve been a permanent fixture on the economic landscape since just about forever.
Why were banks so willing and able to lend so much money to applicants who lacked jobs, income and down payment money?
All the major culprits – including Fannie Mae and Freddie Mac, the Community Reinvestment Act, and our "pro-ownership" tax code had one thing in common: they were tools and creatures of the federal government.
Further intervention in the form of trillion-dollar bailouts and "stimulus packages" will only deepen and prolong the pain.
Adam Smith, more a fan of capitalism than capitalists, once rightly observed, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public"
The honest, successful American businessman whom is respected and admired by all is not necessarily a given, although there are some out there.
Because what’s also quite usual is that government interference makes it almost impossible for honest businessmen to become successful.
Kings have always given their favorites monopolies, legislators have rewarded bribes and revolutionaries nationalize businesses.
Fascist thugs make deals with corrupt corporations to profit at the expense of ordinary citizens.
I believe this sort of thing – government interference in a free market economy for politician’s convenience and to the benefit of the greedy, the lazy, and the corrupt – should be the exception rather than the rule in a free market economy.
What makes a free economy work is a level playing field represented by such things as "the free market," "private property," "a sound currency" and "the rule of law, not men."
Beginning in the Renaissance, European civilization, and particularly Anglo civilization, achieved extraordinary prosperity as government respected property rights, upheld the rule of law, and generally got out of the way of ordinary people’s thrift and industry.
We should all hope and pray we’re not living at the end of this incredible period of freedom’s prosperity.
Because when government begins picking winners and losers – favorites – when, for example, legislators begin pressuring lenders to create irresponsible mortgage instruments to reward minority voting blocks, or when Fed chiefs inflate the currency to keep the booms going and cheer up Wall Street, then we’re headed in an historically wrong direction.
What is really astounding is the fact that most booms and busts over the last century can be traced to one institution – the Federal Reserve System.
This system allows busy-body bureaucrats to pull the strings, manipulate our financial system and establish the value of the money we use.
(Most people believe the Federal Reserve is a government department. Look in the phone book and you will not find it on the government pages, because it’s a privately owned entity.)
The Great Depression, according to many economists, was only as deep and as long as it was because of government interventions by Herbert Hoover (no free market capitalist, in spite of what your high school history teacher may say) and Franklin D. Roosevelt (no savior of the American economy, despite what the mainstream media today tells you).
In fact, Roosevelt’s Treasury Secretary flatly stated that all the New Deal spending had done nothing to fix the problem.
I fear the place to which we’re headed is not a good place after all.