The Market Fundamentalist

http://www.amconmag.com/headline/1287/index.html

The hopes of the Democrat Party for the next election lie in a recovery that allows the unemployment figure to well below the over 10% mark it has now.

That 10% mark is a minimum number. Many put the real number at 17-22%. Among blacks, even higher.

Now that the health care plan is on the “back burner”, and most people think cap’n'trade legislation as well, the focus will be on the economic recovery. And the central planners are hard at work to propose ways to “solve” the problem.

Dennis Kucinich has proposed that the government offer early retirement via expanded social security benefits so that the older workers can be replaced by younger workers. How this central plan will actually expand jobs is not clear. But, Kucinich obviously believes that JOBS are simply SLOTS that you can fit any old human being into without losing a step. Replacing experience with youth–that’s the ticket!

Meanwhile, only a few days after publishing its excellent cover story study debunking the MYTH OF THE VIOLENT IMMIGRANT, (see: http://www.amconmag.com/article/2010/mar/01/00022/), the AMERICAN CONSERVATIVE MAGAZINE has reverted to form by publishing Pat Buchanon’s sister, Bay, in an article that proclaims that the way to create jobs is to …what else?…CUT DOWN ON IMMIGRATION. She trots out the old sawhorse that immigrants are “competing” for our NATIVES’ jobs. Like anyone owns a right to a “JOB” that someone can “steal”.

Both Kucinich and Bay Buchanon are promoting the same economic fallacy: that there is a fixed number of jobs, a PIE if you will, that government can allocate by restricting competition, or merely by cutting up the pie differently.

The economy is not a stable entity like a pie, it is the dynamic interaction of millions of self motivated individuals, that can grow or diminish like any ORGANISM.

In a modern economy, jobs are a contract that carries with it a bundle of rights and responsibilities. But the important thing to remember is that the contract is for PRODUCTION. The ultimate beneficiary of any job is neither the employer, or the employee, but the CONSUMER. In semi free market American capitalism, the Consumer is still king, if a greatly weakened monarch by attacks from the state.

Central Planning, by either the left or the right, will never CREATE JOBS. Only the ability of entrepreneurs to meet consumer demand will create jobs. And consumer demand is relatively low now, as we are in a CORRECTION from massive BUBBLES caused by the state, and its unholy alliance with FRACTIONAL RESERVE BANKING and a STATE CONNECTED SINGLE CENTRAL BANK.

What this means is that even though there are still an infinite amount of human needs to fulfill, the ability to serve them is hampered by the INABILITY OF THOSE WHO WOULD CONTRACT TO HAVE A MEETING OF THE MINDS.

The primary lack of an ability to contract is the barriers to contract that the STATE has raised, directly or indirectly. These barriers are in the form of the usual suspects: Taxation, Regulation, threats of litigation, threats of more legislative interventions, etc.

The last major recession that the US had in an atmosphere of regulatory freedom occurred in 1921, when World War I ended. The war spending boom was now a bust, and the boys came home to glut the existing job market. Unemployment shot up to over 10%.

In that instance, President Harding did almost nothing. What he did do was significant-he instituted an across the board tax cut, that included defense spending. Nothing else. No bailouts, no stimulus package, nothing. Unemployment decreased rapidly, and in about a year the economy was humming again, into the ROARING TWENTIES. The history books do not mention the GREAT DEPRESSION OF 1921.

President Hoover, on the other hand, was a PROGRESSIVE to the core. He instituted the current model of BIG GOVERNMENT INTERVENTION to combat the Stock Market Bubble’s collapse. He raised taxes, signed the SMOOT HAWLEY TARIFF, exhorted businesses to keep wages high, and used the bully pulpit to claim “Prosperity is just around the corner”.

His successor, Franklin Roosevelt, used the same interventionist tactics, although he added his own wrong headed ideas, like ending gold backed notes and contracts, and replacing it with paper money. He tried to centrally plan the economy MUSSOLINI style, but the Supreme Ct voided the NRA as unconstitutional. He tried massive public works, packed the Supreme Ct, empowered unions, and finally, he entered World War II over the objection of the America First Movement. Nothing worked, until after the war. WE DO READ ABOUT THE GREAT DEPRESSION OF 1929 in our history lessons, because it lasted about FIFTEEN YEARS.

Since World War II, the US has followed the same interventionist, Keynesian path to correct the boom and bust cycle that it creates itself through fractional reserve banking, managed by a government connected central bank, and the other regulations that impede the ability of employers and employees, buyers and sellers, to FREELY CONTRACT.

In the first 150 years of the modern capitalist economy, unemployment almost never happened. Yes, there were booms and busts, due again to fractional reserve banking and its alliances with the state, either at the federal or the state level. But they were generally short lived, quickly corrected. Economists never bothered to study unemployment, because it so seldom happened.

In the twentieth century, OTOH, unemployment became a constant concern. In America, we still hope to keep it at 5% officially. In Europe, with its expanded Welfare State, chronic unemployment of at least 10% is a given fact of life. In both societies, the youth and minorities fare much worse.

How can we really CREATE JOBS? Economists like the late British economist WH HUTT (see :http://mises.org/store/Keynesian-Episode-The-P198.aspx) and more modern American economists like Richard Vedder and Lowell Gallaway ( see: http://mises.org/store/Out-of-Work-Unemployment-and-Government-in-Twentieth-Century-America-P295.aspx) who have studied unemployment propose solutions that are very much in line with the recent article by Lew Rockwell ( see: http://mises.org/daily/4083) ” HOW TO FIX THE JOBS PROBLEM”.

It consists of a program that includes:

Unemployment is not due to a lack of work to be done. It is too expensive to pay for the work to be done. So ask yourself, what are those things that prevent deals from being made?

Let me list a few barriers:

*

The high minimum wage that knocks out the first several rungs from the bottom of the ladder
*

The high payroll tax that robs employees and employers of resources
*

The laws that threaten firms with lawsuits should the employee be fired
*

The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?
*

The unemployment subsidy in the form of phony insurance that pays people not to work
*

The high cost of business start-ups in the form of taxes and mandates
*

The mandated benefits that employers are forced to cough up for every new employee under certain conditions
*

The withholding tax that prevents employers and employees from making their own deals
*

The age restrictions that treat everyone under the age of 16 as useless
*

The social-security and income taxes that together devour nearly half of contract income
*

The labor-union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less

Now, that’s just a few of the interventions. But if they were eliminated today, and it would only take one act of Congress to do so, the unemployment rate would collapse very quickly. Everyone who wanted a job would get one.

The Marxists who control the government would never approve these free enterprise reforms, because they still labor under the paradigm that PROFIT = EXPLOITATION. Until that notion is gone from public discourse, and centralized banking and state control of the money and currency is abolished, we will still endure BOOMS AND BUSTS , or periods of feverish economic activity followed by a crash that results in high unemployment for years. And more misguided government interventions that only make the problem worse.

Brendan

http://www.reuters.com/article/idUSLDE60J0PA20100120?type=marketsNews

Germany will slash its feed in tariff subsidies for solar energy. France will also, as will other countries.

The study that Bob claims was paid for by “big oil” is a major reason. It has blown the cover off of the protectionist feed in tariff schemes.

If merely installing solar and wind energy was the goal, then feed in tariffs certainly worked. But, if producing usable energy is the goal, or effectively reducing greenhouse gases, then not so much.

Germany leads the world in installed solar panels, and is second in installed wind power. But the RMI Institute study (http://www.instituteforenergyresearch.org/germany/Germany_Study_-_FINAL.pdf) says:

“Installed capacity is not the same as production or contribution.” In 2008, 6.3 percent of Germany’s electricity production was from wind, followed by 3.6 percent from biomass and 3.1 percent from water. Meanwhile, the report notes, “The amount of electricity produced through solar photovoltaics was a negligible 0.6 percent despite being the most subsidized renewable energy, with a net cost of about €8.4 billion (US $12.4 billion) for 2008.” German consumers foot that bill. In 2008, the price mark-up due to green energy subsidies amounted to 7.5 percent of average household electricity prices. Keep in mind that German residential electricity prices are already high at about 30 cents per kilowatt-hour. The average American pays about 12 cents per kilowatt-hour.

Kind of reminds me of the Canadian Supreme Ct decision that noted that “saying that everyone has access to medical care is not the same as providing access” if you have to wait months or years for procedures.

As for reducing greenhouse gases, the feed in tariffs are also prohibitively expensive.

the RWI analysis found that the feed-in tariffs for solar electricity in Germany are equivalent to paying more than $1,000 per ton to reduce carbon dioxide emissions (the wind power subsidy from feed in tariffs was better at only $80 per ton). In late 2009, an emissions permit for a ton of carbon could be had for less than $20 on the European climate exchange. “Hence, the cost from emission reductions as determined by the market is about 53 times cheaper than employing [photovoltaics] and 4 times cheaper than using wind power,” notes the report. Clearly, feed-in tariffs are an absurdly expensive way to cut carbon dioxide emissions.

What about that protectionist scheme of promoting technological progress in solar power? Again, not so clear that is working either.

Alexander Hamilton proposed that the US adapt protectionist schemes to allow the US to develop its own industry in his “Report on Manufactures”. Bob’s hero Thomas Jefferson opposed him, and Jefferson won. The US did not become protectionist until the invention of the cotton gin spurred high agricultural tariffs around 1817.

But, when it comes to Bob’s pet project, green energy, Thomas Jefferson can take a back seat. ( again, I am attacking the ideas, not the person, but when a person has bad ideas, and is championing them, then that person can be mentioned by name.)

Protectionist policies to promote infant industries never work, for pretty much the same reason that protectionist policies to promote established industries do not work well.

As we unravel the tangled web of protectionist argument, we should keep our eye on two essential points: (1) protectionism means force in restraint of trade; and (2) the key is what happens to the consumer.

Another protectionist fallacy held that the government should provide a temporary protective tariff to aid, or to bring into being, an “infant industry.” Then, when the industry was well-established, the government would and should remove the tariff and toss the now “mature” industry into the competitive swim.

The theory is fallacious, and the policy has proved disastrous in practice. For there is no more need for government to protect a new, young, industry than a mature older industry.

In the last few decades, the “infant” plastics, television, and computer industries made out very well without such protection. Any government subsidizing of a new industry will funnel too many resources into that industry as compared to older firms, and will also inaugurate distortions that may persist and render the firm or industry permanently inefficient and vulnerable to competition. As a result, “infant-industry” tariffs have tended to become permanent, regardless of the “maturity” of the industry. The proponents were carried away by a misleading biological analogy to “infants” who need adult care. But a business firm is not a person, young or old.
http://mises.org/rothbard/protectionism.asp

In this case, rather than spur new technologies in solar panels, the European feed in tariff schemes are promoting a speculative frenzy in existing OLD AND INEFFICIENT solar technologies. Companies are producing the same old solar panels to grab the tariffs , and NOT investing in research and development of new technologies.

The European Photovoltaic Industry Association (EPIA) stressed that it would be important for both France and Germany to follow the evolution of market prices in their feed-in tariff systems.

“We are advocating the implementation of sustainable policy support schemes. That support should lead to an accelerated penetration of solar energy but avoid a market overheat and possible speculation,” said Adel El Gammal, secretary-general of EPIA.

El Gammal has it wrong in the next sentence, when he claims that:

He warned, however, that if feed-in tariff cuts were too high, this would have a detrimental impact on the industry. “It would for instance eliminate smaller actors too early, which in some cases would have innovative ideas,” he said.

The study shows that the “market overheat” and “possible speculation” being CAUSED BY THE FEED IN TARIFFS are the main reasons why smaller actors are being eliminated. The partnership of government and business always makes it harder for the little guy with new ideas.

It is a sad commentary that well intentioned but economically challenged people in America are advocating European ideas like feed in tariffs and socialized medicine when Europe itself is trying to move away from them.

It is also unfortunate that the Green movement which is anti war and voluntarist at its core, and which advocates purely voluntary ideas like fair trade coffee and food coops, is also infused with those who would use the power of the state to restrain free trade, and yes, as we saw this week, free speech as well.

Brendan

A tea party tornado picked up a House and dropped it on Massachusetts yesterday, killing the Wicked Witch of the East, and the health care broomstick she rode in on.

Ding Dong the Health Care Witch is Dead!

The Boston Globe details the voting breakdown. My own lovely sister lives in Natick, a suburb of Boston, which narrowly went for Coaxley. Except for Boston, and Northwestern Mass, where the civil servants who don’t want to brave the snow in New Hampshire go to retire on their lucrative public pensions, the Bluest state in the union was painted RED!

Sure, its only one Red Gang Leader beating another Blue Gang Leader. Brown is a neocon, a pretty boy Republican who wants to keep the US Defense establishment rolling in clover while he promises to cut taxes without cutting spending.

But once enacted, Health Care by Big Government is hard to take apart. The American people didn’t want it, and they have shown for the third and most dramatic time they don’t want the government involved any more than it already is in the most intimate aspects of their lives.

Hooray for Massachusetts!

Brendan

All the talk from the President and the left is about HEALTH CARE REFORM based on the North American and European models, and occasionally Japan.

No one on the left wants to talk about the THIRD WORLD as an example for health care reform.

It is well known that many Canadians come to the US for so called “elective” procedures that they have to wait weeks and months for in Canada.

What is NOT so well known is that many Americans also vote with their feet and go to THIRD WORLD countries for medications and treatments that the current level of American government regulation denies them.

When the FDA refuses to allow terminally ill patients a fast track to experimental drugs that could possibly kill them but might just save their lives, where do Americans go?

Typically, to Mexico, the Carribean and Brazil, where you don’t need a doctor’s prescription to get drugs, and where helpful nurses are available in drug stores, so you don’t have to even pay for a doctors visit.

Alternative medical clinics driven out of the US by the FDA also often set up shop in the THIRD WORLD.
What is even more significant is the state of medical care and medical costs in INDIA. The left should look at the INDIAN MODEL, except they won’t.

The reason is, INDIA is a mostly free enterprise model of health care access, with government playing a relatively minor role.

Another reason is that HEALTH CARE INSURANCE is NOT the primary means of payment for health care in India. Most health care costs are out of pocket.

Another reason is there is no AMA to keep the numbers of Doctors artificially low. Indian medical schools turn out doctors at the rate of 25,000 a year.

The result:

/Because there is so much competition, doctors and hospitals are forced to keep their prices low to get patients. Residents, who go to medical school straight from high school, only make the equivalent of a few hundred dollars a month. An average surgeon’s salary would be around $8,000 per month. The take-home pay to fix a hip fracture, for example, might run between $100 to $300, out of the $1,000 fee to the patient, says orthopedic surgeon M.S. Phaneesha. At his hospital in Bangalore, he says, there are 20 orthopedic surgeons alone on staff. For 1,600 beds, the hospitals employs around 700 doctors full-time; 300 of them are surgeons. In the U.S., by comparison, a first-year resident might take home around $2,500 each month, and the average surgeon more than $20,000 per month. A hip fracture would cost a patient around $30,000, of which the surgeon’s charge is $5,000. Even general practitioners in America earn on average more than $100,000 a year ./

This is no TOP DOWN HEALTH CARE SYSTEM, but instead works the way most UNREGULATED BUSINESSES WORK-to please consumers.

Hospitals are sparkling clean and efficient, at $20 a night. There is NO COST SHIFTING. NO $400 aspirins to compensate for those who by law must be admitted for free.

India is a third world country, and emerging from NEHRU style SOCIALISM only since the early 1990’s. So poverty is a major concern.

With so many medical schools turning out so many doctors, it can be hard to get a handle on the quality of the doctors abilities. The less able may migrate to the poorer neighborhoods.

However, it is time Americans started to question the role of the AMA and the government through its licensure laws to RESTRICT THE SUPPLY OF MEDICAL PERSONELL by limiting the number of doctors and other health care professionals, and by driving alternative medicine into the underground.

The AMA strategy of allowing only the “highest quality” of doctors into the system by controlling the number of entrants into medical schools by a whole series of often arbitrary standards has ensured for its members, and the physicians who are not members, a higher than market rate of return.

These higher salaries in turn could be factor in the large number of MALPRACTICE SUITS and the cry for TORT REFORM.
IF Doctors are supposed to be these fantastic embodiments of wisdom and skill, maybe that is a good reason to sue them if they mess up. Deep pockets make great targets.

There is, after all, a broad range of competence between a quack and a brain surgeon. Most doctors are somewhere in the middle. Training more doctors would provide more doctors who may be a bit on the lower end of the competency scale, but hardly a danger to patients. With more competition, more doctors would be content to find a niche where their competency level is most comfortable.

There is a word for the best way to balance supply and demand, to satisfy the basic needs of consumers as cheaply and quickly as possible, and to generally keep costs down and quality high. The name for that is free market capitalism. The left should take a look at that sometime, as should most Republicans as well.

Brendan Trainor

See-

http://www.salon.com/news/feature/2009/09/03/india/index.html

http://reason.com/blog/printer/130475.html

Link from Reason.com blog, HIT AND RUN

Sometimes, in order to understand how large social organizations work, it is illuminating to examine a relatively trivial example of the dynamic and gain insights into the more complicated large scale organization.

In Oregon, car dealerships, who are facing hard times, are asking the state government to PASS A LAW forbidding car sales on SUNDAY.

Of course, they will say that Sunday is a religious day, and large scale commerce should be banned for religious reasons.

This is a perfect example of the Baptist and Bootlegger paradigm in “rent seeking activity”. (RENT SEEKING is the PUBLIC CHOICE school of economics term for using the state to gain competitive advantages in the market)

The Baptists would be the evangelicals and others who would welcome the State of OREGON to ban car sales on Sunday as a religious gesture of the importance of the SABBATH.

The Bootleggers, in this case, are the CAR DEALERSHIPS who want to cut down their expenses in a sagging economy and try to squeeze more sales out of the Saturdays they are open.

The KICKER is that the dealerships do NOT just want to close on their own. Why? Because PRIVATE CARTELS do not last long, that is why. Even OPEC has its internal discipline problems. If all the current dealerships decide to close down on Sundays voluntarily, why some one might change their mind, or an UPSTART new guy from Nevada might see an OPPORTUNITY FOR PROFIT and open a dealership that is closed on MONDAYS, but open on SUNDAYS, when frustrated weekend shoppers might be willing to close the deal.

Ok, Ok this is small potatoes. What is the point you were trying to make about major issues?

Well, since we have numerous liberals on this list, let’s look at JIM CROW laws.

OMG, he’s talking about RACISM in economic terms! How dare he analyze the relationship between HUMAN BEINGS in anything but purely humanitarian calls for equality?

Well, because, like it or not, we live in a world of scarcity, and with limited knowledge, and those are the conditions that economics is geared to analyze.

Consider that in the DEEP SOUTH, the majority of the white people were racists and wanted to keep blacks down. What would their strategy be? Well, the majority of white people is STILL not the majority of all people. Some whites are not racist, and the blacks might even outnumber the whites.

So, what organ of power would you try to focus your attentions on? Controlling the free market? Not likely, because the free market is well, free. Too many variables.

So, how about controlling the STATE! Yes, that’s the ticket! Concentrate on controlling the STATE!

So, make it harder for blacks to vote. Sure, that is important. Then, the majority of racist whites can elect RACIST governments, willing to pass and uphold JIM CROW LAWS.

Then, be sure the District Attorney is racist, and the judges. Easy to do when justice is a MONOPOLY controlled by the state. Make sure juries are all white.

Then violence and intimidation against blacks will go unpunished, and any uppity blacks will be prosecuted to the “full extent of the law”.

Now, this is most important: Pass laws that state that EVERYONE MUST DISCRIMINATE. No exceptions. Every business must be all white, or all black. No one can move to the South , no big corporations can move in, without obeying the JIM CROW laws.

No white liberals can gain a competitive advantage (like being open on Sundays in Oregon) by being willing to serve both whites and blacks.

There you have it. Jim Crow was a function of the state controlling business, not vice versa.

Free markets in the South would never have supported JIM CROW, because segregation does not make MARKET SENSE. You would have to have two of everything: two locker rooms, two bathrooms for each gender, two lunch rooms, etc. The costs of doing business would be prohibitive. Not to mention the constant racial tensions in the workforce.

That is why when the black man Plessy dared to sit in a whites only railroad car in the 1890’s and was arrested , the RAILROADS paid for his defense all the way to the Supreme CT., which did not uphold his right, or the rights of the railroads either (government regulated, you know) to conduct their business in a PROFIT MAXIMIZING WAY.

So, large corporations usually avoided investing in the JIM CROW south. The south did NOT become prosperous until JIM CROW ended.

Now, what about the civil rights movement? Was it the best solution?

Not necessarily. Sure, the power of the state was crushed. But, the power of individuals to think and act in a private capacity was crushed as well.

Does passing laws saying NO ONE CAN DISCRIMINATE an ethically better option than laws saying EVERYONE MUST DISCRIMINATE?

Given that those who wish to discriminate will face market losses and pay for their discrimination, and that free markets will not sustain large scale discrimination, was it worth attacking private property rights and free speech and free thought to “stamp out” all discrimination?

Those who believe in political correctness, favor forced busing, believe that the government must constantly intrude into the lives and businesses of citizens to enforce “equality” certainly do.

Those of us who are skeptical of government intrusions, and are willing to tolerate private behavior we do not agree with so that the overall freedom of association (and non association as well) is protected, do not.

Barry Goldwater did not vote for the Civil Rights Act, because he thought it would indeed lead to the PC culture we indeed have today.

Was he right?

Brendan

http://reason.com/blog/show/130478.html

Finally, an HONEST POLITICIAN!

No, not honest in the sense of truthful and ethical, but honest in the sense that Gov Rod Blagovetch’s frank ramblings about how much a Senate seat was worth to him on the open market caught by the FBI wiretaps is relevant to several threads we have pursued on our lists.

Like my friend Dennis would say, now we know why they spend millions to get a 100,000 dollar a year job.

Like Chris would say, sure there are some really honest, hard working politicians (most of them Democrats, I would think he would say) but Blagovetch’s blatant admissions underscore what I have said:

1. The worst monkeys climb the greasy pole of politics to the top (FA Hayek)
2. Public choice economics reveals to us that politicians are NOT selfless individuals dedicated to the “common good”, but ambitious pikers driven by self interest, and WITHOUT the competitive checks and balances one finds in the market.
3. As the economist in this blog points out, with all this bailout mania, what we will see is influence peddling writ large, as hundreds of politicians cloak their inner Blagovetch with high sounding words about “saving jobs” or “helping little people keep their homes” or “building a greener world” or just “change” as the corporations line up for favors that will surely be repaid in full down the road.
4. The polticians (ie, the state) ARE the real center of power. They are NOT owned or controlled by corporations or some hidden elite. They ARE the elite, they HAVE THE GUNS, and they dispense the favors that only power can bestow according to THEIR whim.

Brendan

McCain tries to rally his base by claiming that judges are “coddling” criminals and citizens are hiding in their homes while criminals “roam free.”

Never mind that violent crime rates have declined steadily over the last decades. Never mind that most states now allow concealed carry laws so citizens look to themselves, not just the state, for protection. Never mind that the states, such as California, are groaning under the fiscal and moral weight of overcrowed prisons. Never mind that America has one percent of its total populaton behind bars, more than China or Russia. Never mind that prosecutors get overwhelming conviction rates of 95%, and defendants plea bargain even when innocent to avoid going to trial. Never mind that the late chief Justice of the US Supreme Ct frequently spoke out against the rising tide of federal crime legislation. Never mind that 400,000 Americans are in prison for victimless crimes. Never mind the DNA innocence project and other investigations are uncovering numerous examples of innocent people convicted of capitol and other serious crimes. Never mind ….

Oh, never mind. Obama is no better on criminal justice policy. Neither candidate has spent much time even discussing it until McCain’s desparate and out of touch Hail Mary speech.

Brendan

t is the lie that Herbert Hoover was a “laissez faire” do nothing and FDR was a “strong leader” who “created the middle class” through government interventions that has fed the media frenzy for the bailout this last week.

Neither myth is true. Herbert Hoover was no laisez faire ideologue. He was a dyed in the wool Progressive who believed in the Progressive myths of an enlightened elite that would manipulate the economy and society through scientific principles applied through civil service bureaucracies. He was an engineer who had done good work in bringing relief to famine stricken areas of the world but it was a big mistake to believe that his engineering background could successfully manipulate a free society or a complex economy.

Hoover created the FCC, and nationalized the new radio broadband spectrum, giving us the unconstitutional distinction between freedom of the press and government censorship of the airwaves. He was instrumental in creating other big government bureaucracies, including the FAA.

When the stock market tanked, he refused to allow the markets to weed out the bad investments by letting the bad malinvestments fail. There would be unemployment, although probably only for months, not years, if Hoover had let the markets work. Instead, he called on big business leaders to keep wages and therefore prices high, and resist cutbacks. He raised taxes,and pushed through the Smoot Hawley tariff. The tariff, designed to protect American workers from foreign competition in order to “save jobs”, instead spread the depression around the world as countries retaliated by raising their tariffs, and trade ground to a halt.

Roosevelt followed the same protectionist, big government strategy as Hoover, only he went further by imposing fines, creating the fascist NRA (declared unconstitutional after a suit by two brave Jewish chicken growers from Brooklyn), useless make work projects that did nothing to increase productivity, keeping prices high by ordering “surplus” meat and grain to be destroyed, confiscating the citizens gold, and ending convertability of the dollar to gold, thereby setting the grounds for the continuous inflation we have lived with since 1932.

None of Hoover’s or Roosevelt’s interventions worked, they all failed, and the Depression dragged on until finally Roosevelt essentially nationalized the economy by entering World War II. That allowed him to impose wage and price controls, which led to the current employer based health insurance system, which plagues us today.

It was only after the war, in the return to normalcy 1950’s, that the economy recovered to be close to what it was in the 1920’s.

But then, Lyndon Baines Johnson gave us the roaring 60’s, and brought big government and soaring inflation back again.

The Federal Reserve’s fiat money pumping is what keeps the boom and bust cycle going, fueled by the same Progressive social engineering that produced the quotas for poor and minority home ownership, the subprime mortgage mess, and the current meldown.

When the American people told Congress not to bail out the banks, that was Main Street common sense. When the bailout happened, spurred on by mainstream media know nothings and establishment economist know it alls, that was the ugly spectre of Hoover and Roosevelt raising its “do something quick” big government ugly head.

Are we in for another ten year depression? If we continue to allow these interventions, we may be.

But, thanks to Ron Paul, and the internet, we have much more knowledge of the harmfull effects of government intervention. We are already involved in two wars, so mobilizing the country for war is not going to help us forget our problems. We have a chance to bury the ghosts of Hoover, Roosevelt, and big government interventions, including the Federal Reserve, if we act decisively in the months ahead.

Brendan

On the debate:

Obama claims he never pimped for FANNIE Mae. Liar, liar, pants on fire. Truth fact—Obama wrote that letter in 2007, after the mortgage and housing markets were tanking. McCain was little better.

Only Ron Paul knew in 2003…right, Barney?

Both want to stabilize home prices and keep people in their homes. So, now the idea is to prop up mortgages with government (taxpayers) money. So, you and I will be paying for the homes purchased with welfare checks as collateral. Good idea, fella’s. I guess I won’t be getting that Flip this House DVD after all.

Both parties got us into the crisis–YEA! That lady knew her stuff, that’s a town hall question, Yeah!

McCain the reformer–McCain the first amendment champion! The Energy Independence hero! The climate change hero! All Hail McCain the masked marvel of the Senate !

earmarks smearmarks, What is 16 billion when we’ve been talking 700 billion all week?

Energy independece again. 700 billion dollars overseas! To countries that hate us! Like Canada, and Mexico, and Britian, and Saudi Arabia, and Indonesia. They hate us, hate us, hate us.

Moral support for the Ukraine and Belarussia and Georgia and /free membership in Nato?
Do them do them now!

Energy…it could go up! Let’s see, we have to have Alternative Energy—ka ching! And Cap and trade-Ka Ching! And don’t forget T-Bone! Ka Ching!

Middle class tax cuts? Why not, when energy policy will soak the poor and the middle class for every dime they save and then some.

Sacrifice for the state!

Examine every agency! Defense ? Ok one point for MCain, he said he would examine the defense department pork.

Spending freeze except for defense? Why should we freeze defense, we only spend more than the rest of the world put together, John boy!

Obama – a Call to service. Double the Peace Corps! Only a politician would call paid make work a call to service, and a paid program “volunteering”.

We need to think about how we use energy? Does that include Al Gore? Oh wait, if he uses too much electricity in his mansion, he pays his own carbon credit corporation.

We must Buy a safe and efficient car built in America? Why, Senator Obama? I want my BMW! Please! If I work in the Peace Corps will you buy me a BMW?

McCain admits Hoover raised taxes! He really is a maverick!

Walk in clinics? McCain, we have those now. They are in Wall Mart.

Government mandates and fines for health care? No way. Government doesn’t tell you what to do, it just gives you free stuff.

Go across state lines for insurance! All right, McCain, you finally got a good point out there.

Give people choice! Reduce mandates! He said affordable health care (not affordable health insurance). McCain is now on track, too bad we will need all that government health care for the boys who die overseas, John.

Health care is aright, for every American! Obama says you all deserve a nurse by your bed and an ambulance on call. Viagra for every male, botox for every female! He just won the election.

Children are cheap to insure! What planet is Obama from?

State by state find a state where there are no protections…so you can buy insurance from any state (McCain) so that means all the bad insurance companies will move to Arizona…and what, Senator? Somehow, that doesn’t frighten me.

McCain laughs at Obama because he will announce he is going to attack Pakistan, and that will cause resentment. So, John, unannounced sneak attacks do not cause resentment? Just asking.

Good for obama : turned that Teddy Roosevelt thing right around. So speaking softly is singing “”Bomb, bomb, bomb Iran.”

McCain: I was just joking with an old veteran, you know how we old veterans love to joke about killing women and children, heh, heh.

Who was right or wrong about the surge? They mention it, but no real analysis.

No cold war but not the behavior of a wealthy nation to throw its weight around, John? Er, the US was wealthy at one time, and we kinda throw our weight around, don’t you think?

Russia’s naked aggression? Is that like naked short selling? Are you Sure Georgia had nothing to do with it, gentlemen?

Obama wants to send foreign aid to all the Slovak nations, except Russia! Break out the Kilbasa, honey, the check is coming!

Obama : we must anticipate dangers before they happen—like when do governments actually do that, Senator? Can you name one time the CIA has been right in the last century. Or is that just liberal neocon speak for premptive war?

We must cut our Energy use –starve ourselves- to hurt Russia? Can’t I just cut off my nose to spite my face?

Is anyone out there FOR a 2nd holocaust? Raise your hand, please! OK, the gentleman with the funny mustache in the back row..

Iran –that Old canard that Iran wants to wipe Israel off the map. So, lets impose sanctions, enrage the Iranian middle class, and give the Ayatollah more power . Yea, that’s the ticket! Sanctions always hurt the guys at the top, not the MIDDLE CLASS, right Senators?

Yes, Senator McCain, let’s invade some countries we don’t even know where they are at. Like, maybe Iraq, Afghanistan, Iran, Georgia,

We have Unprecedented problems? Yeah, like we were never involved in two land wars in Asia and a depression. Hey, but that’s government—always creative, always coming up with new problems for the politicians to make us miserable over.

Brendan

from and Email post to Renopeace.org

The Savings and Loan Institutions were unstable business entities created by Congress. The plan was for deposit savings (The Savings Part) to fund home mortgages (The Loan Part.) This is unstable because long term loans generally have lower returns in interest income than the liability that short term deposits have in owed interest.

Congress gave them special tax breaks and other privileges so they could pay more in interest than ordinary banks, thereby attracting the deposits that would fund the mortgages.

The free market would never have created Savings and Loans. If the arose, they would not last long in a free market without Government Subsidies.

So, the Savings and Loans were an example of Central Planning gone awry. ( Central Planning means a central government agency PLANS an outcome (in this case more home ownership) and provides directives ( in this case tax breaks and other subsidies) to achieve the centrally planned goal. It is the cornerstone of socialism, communism, and social engineering in a mixed economy.

In the 1970’s the entire nation suffered the whiplash effect of decades of big government, in particular the GREAT LEAP FORWARD of the 1960’s Guns (Vietnam) and Butter (The Great Society) era. Nixon followed this by unilaterally ending the POST WAR BRETTON WOODS international monetary agreements, and took the US off the international gold exchange standard. (1972) . This led to the rise of OPEC, rapid inflation, high unemployment, and high interest rates. This was called STAGFLATION. It marked the end of Keynesian economics, which had predicted that stagflation was impossible, as the dominant economic theory of political economy.

Gosh darnit (to paraphrase Sara Palin) if Jimmy Carter didn’t recognize that something major was afoot, and he appointed PAUL VOLKER to head the Federal Reserve. Volker then used the theories of Milton Friedman, called Monetarism, to end the stagflation by cutting the money supply and letting interest rates rise (float) even higher.

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