Democrats in the house are now talking about socializing 401(k) plans. The plan that is being put forward would stop tax breaks on your 401(k) and would begin “redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.” I assume these guaranteed retirement accounts would never fail just like social security is never going to fail? Too many people in Congress and the Presidency like the socialist democrats and the socialist republicans don’t have a clue. They are either ignorant or liars for thinking that we have some kind of “free market” that is failing the nation. We haven’t had anything close to a free market for at lease 100 years. The government regulates basically everything (think banking, money, housing, the stock market, oil production, oil exploration, gas prices, gas taxes, property taxes, licensing of plumbers, etc.), and then we pretend to have a free market. Those in Washington are using this current crisis which they caused to get more power to themselves. Until the American public is willing to wake up and quit believing the lies we are told daily by most of the republicans and democrats in Washington, things will continue to get worse. Some Christians believe that it is inevitable that things get worse based on their theology. They must remember that their theology doesn’t also teach that they are to be the cause – does it?
Note: I first heard about this on Rush Limbaugh today.
Lew Rockwell has written a new article, Joe the Outlaw. He points out that in the current presidential campaign:
one interesting point has emerged: the archetype chosen to represent mainstream America turns out to be a thorough-going outlaw in the best sense of that term. In this, he is a symbol of the age. We can look forward to the creation and emergence of ever more people like this in the coming years, as the state tightens its grip over every aspect of American life. We will all soon be outlaws.
Joe the Plumber according to recent news report is not a licensed plumber in a state that requires a license for anyone to be a plumber. Lew Rockwell makes the excellent point that:
The real goal of licensing is to create a professional cartel. Fewer providers means higher wages for those with licenses. It is all about boosting income by restricting competition. This is of course a violation of human rights because it impinges on the fundamental freedom of association.
Having such guilds or unions by themselves wouldn’t be such a problem if the government didn’t get involved. The lack of competition is created and the free market abolished when the state gets involved to enforce such restrictions. Lew Rockwell points out that:
There was a time when entry into these fields was governed by the free market, and the system worked fine (contrary to legend). But the big players in these industries sought and obtained state privileges to officially license service providers. It was an income-boosting tactic and it worked. (emphasis added)
The article goes on to discuss the taxes that Joe the Plumber still owes and how this demonstrates an attack by the state on private property. I highly recommend that you read the whole article.
He concludes by saying that Joe
is an outlaw in the same sense that our founders were outlaws. He lives outside the regulations of the state because these regulations attack his freedom and property. It was to end systems such as this that the American revolution came to be. And yet we find ourselves back in exactly the same system, and one incredibly worse in every way.
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 current economic crises involving Fannie Mae, Freddie Mac, AIG, and the government has caused a host of activity by the federal reserve and the treasury. Most people are looking to the government to solve the problem. If only the government would step in to “save” us from the evils of capitalism. We are led to believe that the government has nothing but good intentions at heart and is also omniscient to solve the problem. Unfortunately government and those in it are not even able to look back less than 100 years to see that their solutions have been tried before and failed. Murray Rothbard concludes his book America’s Great Depression with this condemnation of the policies of the Hoover administration:
Mr. Hoover met the challenge of the Great Depression by acting quickly and decisively, indeed almost continuously throughout his term of office, putting into effect “the greatest program of offense and defense” against depression ever attempted in America. Bravely he used every modern economic “tool,” every device of progressive and “enlightened” economics, every facet of government planning, to combat the depression. For the first time, laissez-faire was boldly thrown overboard and every governmental weapon thrown into the breach. America had awakened, and was now ready to use the State to the hilt, unhampered by the supposed shibboleths of laissez-faire. President Hoover was a bold and audacious leader in this awakening. By every “progressive” tenet of our day, he should have ended his term a conquering hero; instead he left America in utter and complete ruin—a ruin unprecedented in length and intensity.
What was the trouble? Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. In contrast to the myth of laissez-faire, we have shown in this book how government intervention generated the unsound boom of the 1920s, and how Hoover’s new departure aggravated the Great Depression by massive measures of interference. The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free-market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of “enlightened” economists. And in any other depression, past or future, the story will be the same.
Unfortunately in the 30s Roosevelt continued to follow and expand upon the policies that Hoover had started. If government and the fed had left the economy alone the great depression would probably have never happened. If they decided to not try and “fix” the problem it would have ended quicker. Too bad most of our current crop of politicians and unelected buerocrats have not learned anything from history.
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