It is to laugh. The fat lady sings.
On Oct 10, 3:43 pm, "M.A. Johnson" <[EMAIL PROTECTED]> wrote: > Blame the Governmentby Murray SabrinThis article originally appeared in > theNorth Jersey Record.If America were a laissez faire economy, it would be > impossible to create the financial bubble we have just experienced.Critics of > President Bush as well as some pundits in the media claim that deregulation > and our "laissez faire" economy have been responsible for the financial > markets' meltdown. Nothing could be further from the truth. > Here's what President Bush recently told a visiting group of journalists in > the Oval Office about the recent $700 billion bailout package:"We might have > done nothing. That would have been utter ruin. Instead, we met the situation > with proposals to private business and to Congress of the most gigantic > program of defense and counterattack ever evolved in the history of the > Republic. We put it into action."You may be wondering how our grammatically > challenged president came up with such an articulate response to a question > about his administration's reaction to the financial crisis. > Well, the above was not uttered by Bush but by another president who has been > vilified by historians and others as a "do nothing" president, Herbert > Hoover. Hoover accepted the Republican nomination for president in 1932 to > seek another term in the midst of the financial meltdown that engulfed the > United States more than 75 years ago; he made the above remarks in accepting > his party's presidential nomination. > The historical record is clear, according to the late economist and historian > Murray Rothbard in his classicAmerica's Great Depression. Hoover intervened > massively in the economy from the time of the stock market crash in October > 1929 up until he left office in March 1933. > Easy money policies > As Rothbard documents in his 1963 study, the financial bubble of the 1920s > was caused by the Federal Reserve's easy money policy that pumped up real > estate and stock market prices. When the bubble burst in 1929, Hoover did all > he could to prop up prices in the name of stability and recovery. > All his efforts failed. > The economy continued to spiral downward. Hoover's legacy was sealed. > However, court historians and mainstream economists have been blaming > Hoover's "inaction" for nearly eight decades instead of his big government > policies that turned a much needed correction into a full-scale panic and > massive depression. > If America were a laissez faire economy (and limited government society), it > would be impossible to create the financial bubble we have just experienced. > For example, in a laissez faire economy, the federal government would not be > able to subsidize housing for families who could not afford mortgages. > In addition, there would be no government-created entities like Fannie Mae or > Freddie Mac that could buy subprime mortgages from banks. And banks would not > be forced by laws such as the Community Reinvestment Act to lower lending > standards for low-income families, many of whom are now defaulting on their > mortgages. > So history is repeating itself in terms of the cause and effects of another > Federal Reserve-created bubble. How do we end once and for all the booms and > busts that have characterized the American economy for decades? > First, a laissez faire economy would end the moral hazard of the financial > system and the mortgage market. In a laissez faire economy, banks would not > be able to borrow short and lend long, creating a huge amount of leverage in > the banking system. There would be no FDIC, which means depositors would have > to be vigilant about how their banks are lending their money. > Banks therefore would extend credit only to the lowest-risk borrowers so > depositors would have confidence in uninsured banks, knowing that depositors > would not tolerate lax lending practices. > Second, in a laissez faire economy there would be no barriers for > entrepreneurs to enter the banking business as there are today. More > competition would mean stronger banks. Wal-Mart or other enterprises could > enter the banking business and compete against the entrenched subsidized > financial elites. > No central banks > Third, in a laissez faire economy, there would be no central bank like the > Federal Reserve that could print money out of thin air and manipulate > interest rates to ridiculously low levels. Instead, interest rates would be > set by savers and borrowers, not by the actions of a few unelected members of > the Fed's open market committee. > In a laissez faire economy, inflation would be abolished because the dollar > would once again be as "good as gold." All dollars therefore would be > convertible into real money. > With both McCain and Obama voting for the bailout bill, there is indeed > virtually no difference between the GOP and Democratic presidential standard > bearers. They are both subservient to the financial elites who influence the > federal government's policy agenda. > Make no mistake, we still have one-party rule in D.C., the Washington Party, > an observation I made in 1971, when another Republican president, Richard > Nixon, turned his back on limited government principles and imposed > wage-and-price controls and severed the last link between the dollar and gold. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
