Tuesday, September 23, 2008

Staring into the Bailout Abyss

I sent this letter to The Wall Street Journal yesterday.

21 September 2008

To the Editor

The Wall Street Journal

New York, NY

(wsj.ltrs@wsj.com)

Editor:

A Kentucky politician remarked, in response to the Federal government’s proposed nationalization of the American economy, that “the free market is dead.” A WSJ front-page headline read, “In Turmoil, Capitalism in U.S. Sets New Course” (Sept. 20-21). The question no one seems to be asking is: Since when has the U.S. ever had a free market, one free of government intervention, or laissez-faire capitalism, one free of government “capital”? Historically, never.

And why is no one asking that question? Because virtually everyone, from the secretary of the Treasury, to the head of the Federal Reserve, to both presidential candidates, to Congress, to the news media, to Wall Street fund managers, to too many denizens of “Main Street,” believes that the government ought to be the bullying gorilla in the marketplace to ensure social or financial equity and justice. Why do so many economic “experts” and politicians believe that? Because they all cling to the idea that the best route to political power and popularity is to offer something for nothing, or for very little, necessarily at someone else’s expense, someone who has no say in the matter. That someone has always been the productive, wealth-accumulating private individual.

Now we have the news media laughably but blithely informing the public that it now owns billions of dollars in bad debt. No, gentlemen and ladies of the anchor desk, the public owns nothing. The government owns the public and will expect it to work hard to erase that “private” debt. This is called fascism, or national socialism.

The recent actions of the Federal government amount to nothing more than panicked regulators and controllers and politicians rushing to stave off, as a friend put it, “reality catching up with unreality,” the unreality of free lunches and low-cost mortgages (which comprise a welfare state within the general welfare state) which must be paid somehow, by someone, at some time. Their actions are also taken to deflect, defer, deny, and postpone justice, whose connection with reality was best dramatized by Ayn Rand in her novel, Atlas Shrugged. And the longer justice is denied, a justice denied ever since the 1960’s, when the welfare state ballooned under Lyndon Johnson, the worse its vengeance will be when reality comes calling.

Don’t blame capitalism for the current crisis. Lay the blame where it belongs: at the feet of the government. Capitalism never promised a free lunch. Our government always has.

Sincerely,

Edward Cline

Yorktown, VA


Of course, I could have gone on for pages - mentioning the Social Security, Medicare, Homeland Security, and other financial scams - or even further back in time beyond the 1960's to the 19th century, but I was afraid I would overload the mind of the letters editor or readers of the WSJ and cause a power-outage. What other things are our political leaders, the news media, the Left and Right not mentioning?

That the scale of the proposed "bailout" is unconstitutional, but the Constitution, limping along as it was long before the current "crisis," is now, for all practical intents and purposes, a dead letter.

That the proposed "bailout" would mean nothing less than the socialist conquest of the American economy, something yearned for by a long line of Democrats, ending most recently with the likes of Barney Frank, Nancy Pelosi, Hillary Clinton, et al.

That, regardless of how soothing and cooperative members of Congress might feel after pushing this conquest through both houses, and how reassured they might feel that they've "done the right thing," the "bailout" will break the spine of the American economy, and precipitate a future and certain collapse.

On another matter, readers will note just how feverish the Democrats are to punish CEOs for their lavish paychecks and severance packages (whether or not these CEO's are overpaid or over-compensated, is a separate issue). You can bet, however, that no Congressman or Senator considers himself overpaid and over-compensated with all his taxpayer-funded medical and other benefits and other perks. I'm waiting to see Matt Lauer or Brian Williams or Charlie Gibson or Bill O'Reilly to throw that hot potato into Obama's or McCain's lap. That is just a rhetorical comment, of course. Neither of them will bring up that subject. Staring into the abyss.

Long Live Lady Liberty!

4 comments:

Anonymous said...

For a thorough description of exactly what is happening, economically, and a solution, see George Reisman's March, 2008, essay on "Our Financial House of Cards and How To Start Replacing It With Solid Gold."

http://georgereisman.com/blog/2008/03/our-financial-house-of-cards-and-how-to.html

Roxanne Albertoli

JMW said...

The bailout proposal apparently is contained on 3 pages. Some have said a complex problem like this cannot be solved with such a small proposal. Others have already started arguing that things must be added to make the proposal work.

I could write a proposal to solve the problem on a single page, in fact in a single sentence: Abolish all regulatory agencies and all agencies with the power to tax. Do this on a local, state and federal level. The then "real" free market will resolve the problems.

Okay, it took me 3 sentences.

Joe said...

Dear jmw,
I can do you one better... no new pages, paragraphs, or even sentences need be written to correct the situation. There are a few that need to be read and adhered to; but seeing as how The Constitution is largely forgotten in D.C. the chances are slim.

Joe Kane

djr said...

$700b / $1m (life-time of productive work) = 700,000 life-times of productivity. That assumes that there's wealth (or slavery), rather than paper in this round of the cultural orgy.