Posted by Libertas2 on 02/28/09

Meltdown by Thomas E. Woods Jr. 

Since the fall of 2008, the common theme from the media, the economists, and the government they serve is the failure of the Free Market. According to them, including the Obama and the Bush administrations and both parties in congress, more regulation, interventionism, spending and debt will solve the crisis. Yet, the very people who caused the mess are the savants who will lead us out of it. As usual, ignoring government failure, they blame everyone but the government and use the crisis to justify more governmental power. The experts not only have given the wrong answers but are also asking the wrong questions. 

The Free Market did not cause this crisis, government interventionism did. Freddie Mac and Fannie Mae, two government sponsored enterprises (GSEs) receiving government tax and regulatory breaks, drew more resources into the housing market then would have been possible in the free market. Hypocritically, the Republicans have attacked the Democrats’ record on Freddie Mac and Fannie Mae, but their record on spending, debt, and government interventionism is as shameful. Both parties have supported the bailouts; both parties attack the Free Market, one more honestly, the other more hypocritically. Those claiming to support the Free Market fail to grasp the real problem, attacking specific programs such as The Community Reinvestment Act, they ignore the cause.

Nobody in Washington and few elsewhere dare to question the single greatest intervention in the Free Market and the entity that has left its mark all over this crisis: the American Central Bank, the Federal Reserve System. When the experts do bring up the Fed, they ask how it will cure the crisis, but never how it has caused the crisis. After stiff opposition to the bailout, President Bush addressed the nation on 24 September 2008. Addressing the “root causes,” he briefly mentioned Fannie Mae and Freddie Mac but said nothing about government interventionism or the central bank. In American political life, one rule is to never mention the inflationary monetary policies of the Fed and how it causes the boom – bust business cycles. President Bush followed the rule and said nothing about the Fed.

Weeks later, as Mike Shedlock put it when President Bush called for an economic summit, “In response to the credit crises President Bush is gathering up all the people who did not see what was coming, denied what was happening, and then failed to see the implication of what was indeed happening.” Bush then spoke of the need to “preserve the foundation of democratic capitalism,” in other words: more government intervention in the Free Market. World leaders were also invited. The French president and the European Commission president called for targeting offshore tax havens, strengthening the IMF, limiting executive pay, and other irrelevant suggestions. As usual, they failed to mention that 1 percent interests rates, which caused the unsustainable growth in the world economies. In October 2008 the editor-in-chief of Slate Group which publishes Slate, a popular website, announced the death of libertarianism because the financial crisis proved what a mess “unregulated markets” could cause. As usual, he did not mention the Fed or its destructive behavior on the Free Market.

The few who have spoken out against the Fed, such as Jim Rogers, Peter Schiff, and James Grant are conspicuously absent from the government list of advisors. Rogers, when asked what he would do if appointed as Federal Reserve Chairman, said he would abolish the Fed and resign. Other “experts” laughed at Peter Schiff when he warned of the coming disaster. So, whom did Bush and Obama pick to be their advisors? The very same people who failed to predict the crises are the ones now listened to as experts to get us out of the crisis.

We are in trouble.

Posted 03/01/09 manding Los Gatos, CA

Buy the book. Buy two and give one to a friend.

Posted by Libertas2 on 02/13/09
Last updated 02/13/09

Dear Mr. Abercrombie,

I'm assuming you voted for the "Stimulus" package. I am against it, but that is not the reason for this letter. I understand that the bill was not available until around midnight before the vote. It was around 1000 pages long. What I would like to know is how can you justify voting for or against a bill before you can possibly read it?

Do you just trust the leadership? Do you just trust the President? Isn't that what the Republicans did under Bush with the Patriot Act and all their other odious acts weakening our civil liberties?

You are sent to Washington to represent the First District of Hawai'i, but how can you represent us if you do not even have the time to read and think about the pros and cons of a certain bill? Are you there just to rubber stamp a bill for your leaders or a Democratic President or just vote against the Republicans? How can you possibly be a free and independent representative for us? I know that this is not your fault, but if you and your staff do not have the time to read, much less analyze a bill, then why are you even there?

David A. Singhiser

Posted by Libertas2 on 02/10/09
Last updated 02/13/09

Last week at the book store while looking through some books about gold and the economy (I can't really remember which book it was), it mentioned Alan Greespan's essay "Gold and Economic Freedom." I had read about it several times and heard Ron Paul mention it, so I thought I should finally read it. I found it in Ayn Rand's CAPTIALISM: The Unknown Ideal. I am new to economics but have been reading as much as I can from The Ludwig von Mises Institute and lewrockwell.com, for the last ten months. Still, I have to say it was an extraordinary essay for me. Based on what little I know, all I can say is, WHAT THE HELL HAPPENED?!

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline-argued economic interventionists-why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely-it was claimed-there need never be any slumps in business.

He writes as if that's a bad idea. It seems like a bad idea. It is a bad idea.

SO WHAT THE HELL HAPPENED?!

SO WHAT THE HELL HAPPENED?!

Statists, he argues, blame gold for the Great Depression, but the real reason they hate gold is that the welfare state is impossible with a gold standard. Taxation cannot support it, therefore, the government must resort to borrowing, but gold hampers government deficit spending. By increasing the money supply, the value of the currency falls.

Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

This is a wonderful essay. "Gold and economic freedom are inseparable."  "Deficit spending is simply a scheme for the confiscation of wealth." SO WHAT THE HELL HAPPENED TO ALAN GREENSPAN?!

Posted 02/10/09 andybreene Plymouth, United Kingdom

Interesting read. I'm currently reading his book, only half way through but he doesn't talk about gold and never mentions Ron Paul.

Posted by Libertas2 on 02/05/09
Last updated 02/13/09

Dear Senator,

I have no illusion and will not be surprised when you vote for the new scam President Obama is pushing on us. He is using fear to further increase the power and scope of the Federal Government (as Mr. Emmanuel said, "Never let a serious crisis go to waste.") Nevertheless, I want you to know that I am against the bailouts. Can you explain to me the moral and constitutional justification for doing this? Can you explain where the money will come from? There are only three sources: inflate the currency, borrow the money, or increase taxes. Can you explain how it is moral to inflate the currency, thus taxing the poorest of our citizens and robbing the people of their savings? Can you explain how is it moral to borrow more money, thus putting our children, our grandchildren, and us further in debt? Can you explain how is it moral to increase the tax burden on a nation that is already suffering, robbing the people of what little the government already allows them to keep in order to bailout incompetent corporations? You swore to uphold and defend the Constitution. How is this bailout constitutional? It is not. It is immoral and unconstitutional. Let's be honest, shall we? We are no longer a constitutional republic under the rule of law; we are a democracy under the rule of the mob. The Constitution is dead. Every vote for a bailout, every unconstitutional act of Congress, the President, and Judiciary shows the contempt the three branches have for the Constitution, making a mockery of it and your oath of office to uphold it.

David A. Singhiser

Posted 02/06/09 crashnct Provo, UT

Wow, good letter

Posted 02/06/09 Shirkdog Belcamp, MD

Nice Letter. I took a different approach, using Thomas Jefferson as my argument. You can check out my posting with the Letter to my senators. I tried to appeal to the notion, that we are a republic, we want to defend our republic of the United States, but we need to take care of ourselves in our individual states. Phone lines were down, so I printed and faxed the letter.

Posted 02/06/09 Heather D Port Byron, IL

Great letter David. There seems to be a great deal of back and forth on this "Stimulus" in the Senate, and maybe I am naive, but I am hoping that they are receiving a great deal of letters such as yours and they are getting a bit nervous... I sent my letter yesterday, and I will call today.

Posted 02/06/09 sjaye Chicago, IL

I am amazed at how short you were able to make your letter! All of my recent letters to my congressmen and senators have been coming out 2 pages at minimum. I cannot remember the last time I wrote my congressman/senators a letter that did not include brief description of article 1 section 8. Your shorter letter may be more effective. But, I live in IL-4, so I guess it probably doesn't matter.

Posted 02/06/09 libertyspirit Modesto, CA

I could not have said it better. Braaavo!

Posted 10/18/09 james.mitchell Schofield Bks, HI

Spot on!

Posted by Libertas2 on 11/03/08

Naomi Wolf and Lew Rockwell discuss America's Slow-Motion Fascist Coup. 

It's a great discussion; don't miss it.

Posted 12/17/08 Peacetrain Honolulu, HI

Thanks for the link to that Lew Rockwell interview.

Posted 01/27/09 CHADK HONOLULU , HI

Hey Sing!