When Ron Paul was running in the Republican presidential primaries, he was ridiculed for his warnings that the U.S. financial system as managed by the Federal Reserve and the Department of the Treasury was on the way to collapse. Actually, he and others whose thinking has been shaped by Austrian School of Economics have been predicting this for many years.
Now, we see federal bureaucrats desperately spending hundreds of billions of taxpayers' money in nationalizing financial institutions to avoid a collapse that has building for many years. (We used to call this "socialism.") They do this in violation of the Constitution of the United States, which explicitly states that no spending can occur without congressional authorization. Of course, the Congress has no interest in intervening.
And what do Obama and McCain say? We need more federal regulation.
Wouldn't it be more sensible to say that the federal government should do nothing? Shouldn't we see this as an imbalance in the economy--too much consumption and too little saving and production--created by federal efforts to stimulate the economy? And isn't the only way to work out of this imbalance to endure the pain of a year or so of drastic economic readjustments? Can't we anticipate that federal bailouts with taxpayer money will only prolong the pain?
For an example of the Austrian economics analysis of this crisis, go to an article at the Ludwig von Mises Institute website by Antony Mueller.
2 comments:
As the President and the Federal Reserve Bank’s Chairman, Mr. Bernanke, stood side-by-side, the problem can not be more apparent. For the last 100 years, the national debt has ballooned due to the printing of money by the Federal Reserve Bank which is a for-profit private bank. As the bank prints the money for the government, the money is borrowed with interest. This borrowed money then becomes part of the national debt. In turn, the US government taxes the American people to pay the debt which includes the interest amount accrued. This financial arrangement has made the owners of the bank as rich as anybody’s wildest dreams. This scenario must change if the American people want to retake ownership of their government. The Congress must fundamentally change how business has been conducted by either abolishing the Federal Reserve Bank to have the US government print the people’s money, or amending the terms of its charter with the FRB where a fixed service fee is provided to them when they are required to print more paper money. If no changes by the Congress are enacted, then as surely seen on the steps of the White House, the same people will continue to save themselves and their banks at the expense of the American taxpayer.
I remember the hue and cry that arose roughly ten years ago when Clinton proposed having the federal government invest the receipts from Social Security payroll taxes in the private sector, as an alternative to the proposal for individual, privatized accounts. Socialism! they hooted. And now we have a "conservative" administration proposing to invest up to $700 billion in funds (that we don't have) to buy up firms that Wall Street won't touch.
We truly are descended from monkeys.
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