Mises.org has posted an excellent article on free-market education to their site. I recommend that you go read it for yourself, but will give a short synopsis here. A teacher in a San Diego high school decides to sell advertising on tests and quizzes to local area businesses and parents. This helps the teacher to do his best job in class without incurring more expenses himself. People allowed to operate within the free-market will figure out a profitable way to do the best thing for all parties involved. Taxpayer funded schools (or anything else for that matter) are nothing but a drain on the taxpayer and will always do a poor job. Think of the irony of congress getting a pay raise while they demand pay cuts for the automaker executives. We need to remember the housing bubble which precipitated the current crisis started with the fed and it’s socialist manipulation of credit. Congress could control or abolish the fed if they cared. Shouldn’t they take a pay cut – or be fired?
Tag Archive for 'bailout'
The book Pillars of Prosperity is a collection of speeches and essays by Ron Paul that lay out his “views of the proper role of government, namely that it should serve only to protect the life and property of its citizens.” In a 1984 speech (page 3) he shows the folly of big government and how it is perpetuated by the politicians. The problems of big government stem from the ease in which they are duped into supporting bad policy. Ron Paul points out that:
the politician, per se, is a lot less important than he appears. He is basically a puppet of public opinion that reflects the prevailing ideas of the intellectual and thought leaders.
Bob Inglis, the Republican congressman from South Carolina, gives an excellent example of this in his votes for the bailout bill. He rejected sound economics that predicted the crisis. He rejected free market solutions that would have eliminated the problem. He failed to realize that current government involvement by congress and the fed means that we have nothing more than a centrally planned “free market” (socialism). He said that doing something was better than nothing while blindly following the socialist elite who said that the bailout was the only way.
Unfortunately as Ron Paul continues to explain:
Political success is the single goal that drives participants in our political system. No invitations to participants are sent to men of principle, upholders of equal rights, and defenders of the Constitution. Determined political aspirations under today’s circumstances are key to achieving a successful political career—the career being an end in itself. We must be aware that this system of politics is not conducive to bringing about changes necessary to solve our problems. The legislative and political intrigues that control the system for the benefit of the special interests must one day come to an end if personal liberty is to be restored.
We all must realize that no President or member of Congress will ever save us from our problems. Central planning to prevent chaos will always turn into centrally planned chaos. This chaos makes the politican think that he just needs to do more and that is always the wrong answer.
Reuters reports that Hugo Chavez, the socialist president of Venezuela, says that “Bush is to the left of me now.” He gives the reason when he points out that President Bush, “announced he will buy shares in private banks.” Hugo Chavez has been criticized for nationalizing his oil industry and other sectors of the economy of Venezuela. He does have a point that there isn’t much difference. The article continues to blame it on the crisis we are in but socialism is still socialism. It never works and it is what got us in the mess to begin with.
Ron Paul was on Fox Business on Tuesday after the President explained how the bailout of banks would be done.
The Wall Street Journal has some interesting facts concerning Monday’s 11% gain in the market. The article, Dow Takes Giant Leap as Bailouts Snap Gloom, explains that this was the fifth biggest percent gain in the history of the Dow. The other dates on the list are even more interesting. The top 10 dates except one in 1987 and this one in 2008 all occurred during the Great Depression between 1929 and 1933. The third highest occurred October 30, 1929 which is just six days after the crash of October 24, 1929 that is usually credited as the start of the Great Depression.
Economics in One Lesson is an excellent book by Henry Hazlitt that attempts to help people to correctly think through any economic situation. The one lesson is reduced to a single sentence on page 5 of the Mises edition:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
The lesson can be applied to the bailout and the current economic situation. The government seems to believe that the problem is a lack of credit. The answer they say is to expand available credit through the bailout passed Friday and to increase the money supply through the Fed. Reuters reports:
The U.S. Federal Reserve said it would begin paying interest on reserves banks hold at the Fed, a move that would allow it to keep flooding markets with cash without driving its benchmark federal funds rate below target (U.S. urges global action on credit crisis).
This misses the bigger issues and ignores “the longer effects of any act or policy.” The current crisis was caused by easy credit – not lack of credit. Subprime mortgages were increased because that is what the government wanted. Continue reading ‘Intervention is the Problem’
The senate voted to pass their version of the $700 billion bailout of the rich by the poor. I wasn’t suprised to find that Lindsey Graham voted for it. It is great to see that Jim DeMint is one South Carolina senator with some economic sense. You can see how your senator voted here.
Now would be a good time to contact your congressman again to make sure that they don’t pass the revised version on Friday. Congress.org makes it easy to tell your congressman what you think.
Robert P. Murphy, author of The Politically Incorrect Guide to Capitalism, has written new article on Mises.org explaining the bailout that failed yesterday and will probably be attempted again on Thursday in a slightly altered form. The conclusion of his article expresses the main problems with the bailout:
The Paulson Plan is a heist. It is a grand scheme in which the public will end up owing hundreds of billions of dollars to holders of new debt claims issued by the US Treasury. The plan won’t “prop up” asset values and it won’t provide any real stimulus to the economy.
Despite the dire warnings — coming from the same folks who brought you the Iraq invasion to remove WMD — there is no threat of a financial meltdown. If Goldman Sachs failed, the sun would still rise the next morning.
Far from providing stability and confidence, the Fed, Treasury, and SEC’s recent moves have ensured that US capital markets will now function with the same efficiency as public education in this country. The Paulson Plan is one more step in the socialization of America, but it is also a great bank robbery.
You can go to The Great Bank Robbery of 2008 to read the entire argument and to understand more fully why the government wants to do this and what they hope to accomplish.
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