Time for some economics lessons boys and girls. Here’s a couple must read articles. I suggest you bone up on this a bit. If you don’t, the assholes that actually created this mess, will try to “fix” it. Problem is, if you broke it because you’re a moron, you aren’t going to fix it, for precisely that very same reason. Moron.
“Suppose you were an idiot. And suppose you were a member of congress. But I repeat myself.”
Mark Twain
“All Congresses and Parliaments have a kindly feeling for idiots, and a compassion for them, on account of personal experience and heredity.”
- Mark Twain
The New Deal Would Have Worked if…
Presidents Hoover and Roosevelt turned an ordinary business recession (which should have lasted only about two years) into the worst economic downturn in our history. They accomplished that feat by pursuing the same economic policies now urgently sought by liberal supporters of president-elect Obama.
First, by raising income taxes on individuals and businesses; taxing “the rich” and distributing receipts to favored economic and social classes.
Second, by condemning businessmen as social criminals (note current rhetoric by Senator Charles Schumer and Congressmen Henry Waxman and Barney Frank).
Third, by promoting inflation and devaluation of the dollar (Fed Chairman Bernanke and Treasury Secretary designate Timothy Geithner are neo-Keynesian, flood-the-market-with-artificial-money advocates).
Fourth, by clamping many rounds of new regulations upon business.
Fifth, by supporting socialist labor unions (see the Wall Street Journal’s interview with SEIU’s CEO Andy Stern).
Sixth, by punishing businesses that sought to reduce costs enough to enable resuming production at a profit. Major employers that reduced wages or laid off workers were threatened with Federal reprisals.
Seventh, by pursuing beggar-thy-neighbor protectionist policies (raising tariffs, or today rescinding and curbing free-trade agreements with foreign nations in order to please labor unions).
Eighth, by centralizing business management decisions in Washington bureaus (see the current possibility of bailing out the Big Three automakers and subjecting their business plans to Federal oversight).
Ninth, by making it impossible for banks to float bonds for long-term credit to support business expansion; uncertainty about what the Federal government would do next was the enemy of credit expansion (witness today, when credit markets remain frozen, because of massive flip-flops in bailout programs by the Treasury and the Fed; Bear Stearns is merged into Chase, but Lehman is allowed to go belly up; The Treasury is to buy bad assets from lenders; then, instead, it injects capital into selected banks).
Tenth, by making daily business decisions a matter of speculative chance; FDR’s New Deal came out with so many new plans, new agencies, and new regulations, month after month, that it became impossible for businessmen to make rational decisions for long-term investments that were needed to create new jobs and to ramp up the economy.
For more background, read Robert Higgs’s post on the Mises.org website, The New Deal and the Great Duration.
More
The Blame Game
No one wants to accept personal responsibility for disaster. It’s easier to point fingers at someone else.
Collapse of the subprime mortgage market and, along with it, the housing boom and financial markets, pulls everyone into the act. All of us have been injured to some degree, and we want a scapegoat.
Politicians, who enacted laws supporting the housing bubble, want to hang Wall Street executives. Liberal-progressives condemn free-market capitalism. Some see a dark conspiracy in which President Bush caused, or allowed to happen, the 9/11 terrorist attacks and the present financial debacle in order to benefit his rich supporters.
More
2 Responses »
