Obama Gets Real

By:

Peter Schiff

Friday, December 9, 2011

For most of his time as a national political figure, Barack Obama has been careful to cloak his core socialist leanings behind a veil of pro-capitalist rhetoric. This makes strategic sense, as Americans still largely identify as pro-capitalist. However, based on his recent speech in Osawatomie, Kansas, the President appears to have reassessed the political landscape in advance of the 2012 elections. Based on the growth of the Occupy Wall Street movement, and the recent defeat of Republicans in special elections, he has perhaps sensed a surge of left-leaning sentiment; and, as a result, he finally dropped the pretense.

According to our President's new view of history, capitalism is a theory that has "never worked." He argues that its appeal can't be justified by results, but its popularity is based on Americans' preference for an economic ideology that "fits well on a bumper sticker." He feels that capitalism speaks to the flaws in the American DNA, those deeply rooted creation myths that elevate the achievements of individuals and cast unwarranted skepticism on the benefits of government. He argues that this pre-disposition has been exploited by the rich to popularize policies that benefit themselves at the expense of the poor and middle class.

But Obama's knowledge of history is limited to what is written on his teleprompter. And his selection of the same location that Teddy Roosevelt used to chart an abrupt departure into populist politics is deeply symbolic in the opposite way to that which he intended. It is not by some genetic fluke that Americans distrust government. It is an integral and essential part of our heritage. The United States was founded by people who distrusted government intensely and was subsequently settled, over successive generations, by people fleeing the ravages of government oppression. These Americans relied on capitalism to quickly build the greatest economic power the world had ever seen - from nothing.

But according to Obama's revisionist version of American history, we tried capitalism only briefly during our history. First, during the Robber Barron period of the late 19th Century, the result of which was child labor and unprecedented lower-class poverty. These ravages were supposedly only corrected by the progressive policies of Teddy Roosevelt and Woodrow Wilson. We tried capitalism again in the 1920s, according to Obama, and the result was the Great Depression. This time, it allegedly took FDR's New Deal to finally slay that capitalist monster. Then, the account only gets more farcical. Apparently, we tried capitalism again under George W. Bush, and the result was the housing bubble, financial crisis, and ensuing Great Recession. Obama now argues that government is needed once again to save the day.

This view is complete fiction and proves that Obama is not qualified to teach elementary school civics, let alone serve as President of the United States. I wonder what other economic system he believes we followed prior to the 1890s and 1920s (and during the 1950s and 1960s) that that he now seeks to restore? Capitalism did not start with J.P. Morgan in 1890s or John D. Rockefeller in the 1920s as the President suggests. In fact, it was about that time that capitalism came under attack by the progressives. We were born and prospered under capitalism. The Great Depression did not result from unbridled capitalism, but from the monetary policy of the newly created Federal Reserve and the interventionist economic policies of both Hoover and Roosevelt - policies that were decidedly un-capitalist.

The prosperity enjoyed during mid-20th century actually resulted from the incredible progress produced by years of capitalism. Contrary to Obama's belief, the New Deal and Great Society did not create the middle class; it was, in fact, a direct result of the capitalist industrial revolution. The socialist programs of which Obama is so fond are the reasons why the middle class has been shrinking. America's economic descent began in the 1960s, when we abandoned capitalism in favor of a mixed economy. By mixing capitalism with socialism, we undermined economic growth, and reversed much of the progress years of laissez-faire had bestowed on average Americans. The back of the middle class is being broken by the weight of government and the enormous burden taxes and regulation place on the economy.

America's first experiment with socialism, the Plymouth Bay Colony, ended in failure, and our most successful colonies - New York, Virginia, Massachusetts - were begun primarily as commercial enterprises. When the founding fathers gathered to write the Constitution, they represented capitalist states and granted the federal government severely limited powers.

Apparently, Obama thinks our founders' mistrust of government was delusional, and that we were fortunate that far wiser groups of leaders eventually corrected those mistakes. The danger, as Obama sees it, is that some Republicans actually want to reverse course and adopt the failed ideas espoused by great American fools like George Washington, Thomas Jefferson, John Adams, and Benjamin Franklin.

The President unknowingly illustrated his own contradictory thinking with the importance he now places on extending the temporary payroll tax cuts. If all that stands between middle-class families and abject poverty is a small tax cut, imagine how much damage the far more massive existing tax burden already inflicts on those very households! If Obama really wants to relieve middle-class taxpayers of this burden, he needs to reduce the cost of government by cutting spending. After all, there is no way to pay for all the government programs Obama wants simply by taxing the rich.

History has proven time-and-again that capitalism works and socialism does not. Taking money from the rich and redistributing it to the poor does not grow the economy. On the contrary, it reduces the incentives of both parties. It lowers savings, destroys capital, limits economic growth, and lowers living standards. Maybe Obama should take his eyes off the teleprompter long enough to read some American history. In fact, he could start by reading the Constitution that he swore an oath to uphold.

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"For America to remain a capitalist nation, America's banks must remain free. Remember this as you listen to anti-bank slanders from the White House"

Socialism: The mob assaults against our banking system by unemployed leftists and their political allies are part of a larger strategy to control the commanding heights of our economy. And we'll all be much poorer for it.

The White House has thrown in with the anticapitalism crowd, and banks had better watch out. You only had to hear President Obama's cynical, politicized expressions of sympathy for the unwashed legions "occupying" Wall Street this week to be worried.

"Not only did the financial sector, with the Republican Party in Congress, fight us every step of the way," Obama said at his news conference Thursday. "But now you've got these same folks arguing we should roll back all those reforms and go back to the way it was."

But no criticism of the demonstrators.

In fact, added Treasury Secretary Tim Geithner, "We are going to push back harder," making what sounds like a fairly explicit threat against the banks.

Welcome to class warfare, 2011-style. Obama's ratings have never been lower, and administration policies leading to a dead-in-the-water economy with 9%-plus unemployment are incredibly unpopular.

So he must think his only hope for re-election is to somehow tie the GOP to fat-cat bankers on Wall Street and then convince voters that the banks are to blame for all their ills.

Sound cynical? It is. But this is what Obama and the Democrats are doing. They've even put out a video: "Republicans: On the Side of Wall Street, not Consumers."....(READ THE REST HERE at Investors.com)

Time To Kill The Welfare State and Embrace Capitalism

Robert Tracinski writes an excellent article about the miserable failure of the welfare state or socialism/communism. Government run economies DO NOT WORK. Let's learn the lesson and embrace what does work - CAPITALISM. Below is Mr. Tracinski's article.

A while back, Peggy Noonan wrote that "unsustainable" is the "word of the decade." She's onto something. From the debates over Social Security and Medicare reform, to the Greek debacle in Europe, to the pensions of state government employees, to the higher-education bubble, we are saddled with institutions that are economically unsustainable. They are doomed to collapse by the ruthless certainty of arithmetic.

What do all of these things have in common? They are manifestations of the modern welfare state--and that is what is unsustainable.

I could rehearse the statistics. Social Security is projected to completely use up its trust fund in 2036 and Medicare in 2024, but both systems are already going into the red because there are no actual assets in those trust funds. As Social Security and Medicare begin to pay out more than they take in from payroll taxes, they are swallowing up the entire federal budget and guaranteeing a steady increase in our already dangerous debt. For some state governments, like California, insolvency is looming. For others, it has already arrived; Illinois hasn't paid its bills for years. And where we're all headed is demonstrated by Greece, where government debt now equals more than 175% of the country's annual economic output, well above the threshold (roughly 100%) where debt starts to become impossible to service.

Everyone has already had plenty of time to absorb these statistics. What most people haven't absorbed yet is the basic economic unsustainability of the welfare state.

The welfare state is taken for granted as the "normal" state of affairs, as if it has always existed. At least, it is assumed that the welfare state has been around for so many decades that the current crisis is just a temporary aberration, a rough patch that we can get through with only minor reforms. But the actual economic history does not bear this out. The welfare state "as we know it"--that is, at its current size--is a product of recent decades. In all of its branches, it has vastly increased just in the past 30 to 40 years. So the current crisis is not some temporary aberration. It is cause and effect. It is a direct consequence of the modern welfare state

Let's take a look at the major branches of the welfare state, particularly the ones that are in crisis. They are: education, government employment, health care, and retirement.

The first two are interconnected. State governments are in crisis, not because of firefighters and policeman, but mostly because of salaries and pensions for public school teachers. Government spending on all levels for public education has more than doubled since 1970, after adjusting for inflation, with no improvement in the system's results.

Something similar has been happening in higher education, mostly through the indirect mechanism of student loans...READ "The Half-Life of the Welfare State" by Robert Tracinski at RealClearMarkets.

"The Destruction of Capitalism in the Very Country that Created it."

Don't know much about Perdie, but it seems he's walking across America to find out for himself what makes America tick. He started this to bring attention to governments massive deficit spending and its massive expansion of power. I take my hat off to this courageous young man. Support him by watching his videos on YOUTUBE and leaving comments and. I'm not sure if he's asking for donations?

Europe, IMF and the European Central bank Admit Quietly that Government Healthcare is Unsustainable. Surprise!!!!

So the cat is out of the bag. Europe admits that government run healthcare is UNSUSTAINABLE. Are you surprised? Of course not. Most Americans know that government run anything leads to bankruptcy, failure and mediocrity. Let's take back America for Americans before it's too late for us. Let's learn the lesson of Greece and go back to Capitalism, the system which is "based on the recognition of individual rights, including property rights, in which all property is privately owned." ("What Is Capitalism?" in Capitalism: The Unknown Ideal by Ayn Rand). Read "Guess What Greece Has to Jettison" by

Policy Failure: Greece was told that if it wanted a bailout, it needed to consider privatizing its government health care system. So tell us again why the U.S. is following Europe's welfare state model.

The requirement, part of a deal arranged by the IMF, the European Union and the European Central bank, is a tacit admission that national health care programs are unsustainable. Along with transportation and energy, the bailout group, according to the New York Times, wants the Greek government to remove "the state from the marketplace in crucial sectors."

This is not some cranky or politically motivated demand. It is a condition based on the ugly reality of government medicine. The Times reports that economists — not right-wingers opposed to health care who want to blow up Times Square — say liberalizing "the health care industry would help bring down prices in these areas, which are among the highest in Europe."

Of course most of the media have been largely silent about the health care privatization measure for Greece, as it conflicts with their universal, single-payer health care narrative.

The public health system in the Hellenic Republic is operated by the Ministry of Health and Welfare, where centralized decisions and rules are made.
It provides free or low-cost treatment through what is essentially a single-payer system established in 1983 when the Socialist Party was in power. Family members and retirees are also covered. Like the systems in Britain and Canada, it has agonizingly long waiting lists...READ the rest here at IBD.

The Looting Has Been Signed Into Law With the Health Care Bill - Now Comes Gang Rule

A few decades ago a penniless, Russian immigrant made it big in America. How? By writing about her philosophy of individualism, freedom and limited government. She hit a chord among the people of her adopted country. Her ideas are more important today as Washington takes over our lives and is force feeding us statism and gang rule bit by bit.

...The degree of statism in a country's political system, is the degree to which it breaks up the country into rival gangs and sets men against one another. When individual rights are abrogated, there is no way to determine who is entitled to what; there is no way to determine the justice of anyone's claims, desires, or interests. The criterion, therefore, reverts to the tribal concept of: one's wishes are limited only by the power of one's gang.

...Statism-in fact and in principle-is nothing more than gang rule. A dictatorship is a gang devoted to looting the effort of the productive citizens of its own country. When a statist ruler exhausts his own country's economy, he attacks his neighbors. It is his only means of postponing internal collapse and prolonging his rule. a country that violates the rights of its own citizens, will not respect the rights of its neighbors. Those who do not recognize individual rights, will not recognize the rights of nations: a nation is only a number of individuals. ("The Roots of War" in CAPITALISM: THE UNKNOWN IDEAL by Ayn Rand (1966)

Doctors Should Go On Strike!

What would happen if Economic freedom was lost? In her novel, Atlas Shrugged, Ayn Rand showed what happens to a society that allows its government to go down the road of National Socialism: over taxation of the successful to support the poor and taxation of all people to support an assortment of government bureaucratic programs none of which are allowed under the United States Constitution, and the support of inefficient businesses in the name of saving jobs and the overburdening of the more efficient with rules and regulations.

Rand demonstrates that in this kind of atmosphere the only way to “flourish” is by businessmen becoming corrupt in order to seek profits. To do this, of course, they must manipulate crooked politicians on the take. Sound familiar to anything happening today?

The Health Care bill which seems likely to pass after reconciliation between the Senate and House versions will almost certainly take us, by a giant leap, to socialism by turning our doctors into slaves of the state. Think what this will do to the quality of young men and women who decide to become doctors. Who do you think will sign up to train for 10-15 years of grueling study and hardship in order to practice a profession where the majority under the best of circumstances makes an OK living? For the most part it will not be the best and the brightest but the ones who can “work the system” as Rand showed in her novel. In a sense there will be a strike by the doctors - the best, brightest and honest ones will NOT become doctors.

Rand’s novel depicts a scenario where the men of the mind go on strike. Brilliant bankers, engineers, financiers, doctors and nurses, all decide to withdraw their minds from the market place. Hundreds go to a secret town in the mountains to start a new society based on individual rights and economic freedom. They do this as a declaration of their right to think, live and exercise their profession as they see fit.

Maybe the beginning of the 2nd decade of the 2nd millennium is the time for a showdown between statism and freedom, Socialism and Capitalism, and between the chained mind and the free mind. It’s time for Americans to learn what Capitalism is and what huge benefits and riches it has provided those few nations that follow even partially its principles, and we must learn that governments exist to PROTECT rights….not to violate them as ours has for the past century in ever increasing amounts.

“Capitalism, the system of individual rights, has brought increased freedom to men all over the world. In Europe, capitalism ended feudalism…In America... the principle of individual rights impelled the British colonists to throw off the rule of the monarchy and establish history’s freest nation – and the logic of the country’s founding principles led, in less than a century, to the abolition of slavery…”

“Capitalism is the system of freedom…”
“Capitalism is the system of wealth…” (The Capitalist Manifest by Andrew Bernstein; University Press of America)

How We Got To The BlackHole We're In Today - Expanding Government

The April 2009 issue of The Intellectual Activist has a very good article, called "Counter-Revolution - The Return of the Old Left" - explaining what happened to our tanked economy and why. Robert Tracinski starts out by writing that we are headed to repeating all of the mistakes of the 20th century but that hopefully it's the last time and that we will learn once and for all the moral superiority of capitalism versus the disaster of socialism. All we have to do is look at history and decide as a nation to defend freedom which above all includes freedom in the sphere of economics. The only economic system that has proven itself to be the engine of wealth creation and the only way for man to pursue his own happiness is capitalism.

The bailouts for the banks and automakers make no sense from a purely economic standpoint. Instead, one must understand their political purpose: they are a laboratory. The bailouts created a special zone of the economy in which the government has an excuse - as the provider of bailout funds-to exercise dictatorial control over private businesses. This is a laboratory for the kind of economic dictatorship the left would like to exert in every area of the economy.

In the case of the auto bailouts, we can see quite clearly the uses to which capital will be diverted under this regime. It will be used for a favorite cause of the Old Left - propping up the labor unions-and for the central cause of the New Left: environmentalism...

...The same is true of the $787 billion economic "stimulus" bill passed in Congress in February. The spending in that bill is also an attempt, not to stimulate actual economic production, but to divert more money into the agendas of the Old and New Left-a combination of welfare statism and environmentalism.

...It is now a central premise of contemporary economic theory to refuse to consider the long-term consequences of the government's actions.

Capitalism Is A Love Story - It Keeps on Giving

Walter Williams reminds us Capitalism is so far the only economic system devised by man that has brought more wealth to more people and countries that have chosen to practice its' major precept: Private ownership and control over the means of production. Moore is either dumb or he plays dumb. There's no way you can't know this fact about capitalism.

...Capitalism is an economic system characterized by private ownership and control over the means of production. The distribution of goods and services and their prices are mainly determined by competition in a free market. Under such a system the primary job of government is to protect private property, enforce contracts and ensure rule of law.

...If one ranked countries according to whether they were closer to the capitalistic end of the spectrum or the socialistic or communistic end, then ranked countries according to per capita GDP and finally rank countries according to Freedom House's "Map of Freedom in the World," he would find a pattern that is by no means a coincidence. The people in those countries closer to the capitalist end of the economic spectrum have far greater income and enjoy greater human rights protections than those toward the socialist and communist end.

...Most of our country's serious problems can be laid at the feet of Congress and the White House and not at capitalism. Take the financial crisis. One-third of the $15 trillion of mortgages in existence in 2008 are owned, or securitized by Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing and the Veterans Administration. Banks didn't mind making risky loans and Wall Street buyers didn't mind buying these repackaged loans because they assumed that they would be guaranteed by the federal government: read bailout by taxpayers. Under a capitalist system, financial institutions would not have been intimidated or encouraged into making risky loans and neither would they have been bailed out if they did so. READ at CAPMAG.com

Frederic Bastiat - A Great Defender of Capitalism and Freedom from Do-Gooders

The purpose of government is to protect the rights of the individual. No more and no less. Frederic Bastiat (1801-1850) was a French economist, statesman and author. The quotes below are from "THE LAW" published as a pamphlet in 1850. He said, and is correct that socialism must inevitably degenerate into communism.

"Let Us Try Liberty" by Frederic Bastiat
Away with their rings, chains, hooks, and pincers! Away with their artificial systems! Away with the whims of governmental administrators, their socialized projects, their centralization, their tariffs, their government schools, their state religions, their free credit, their bank monopolies, their regulations, their restrictions, their equalization by taxation, and their pious moralizations!

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty...

"The Desire to Rule Over Others"
This must be said: There are too many "great" men in the world - legislators, organizers, do-gooders, leaders of the people, fathers of nations, and so on, and so on. Too many persons place themselves above mankind; they make a career of organizing it, patronizing it, and ruling it.

"Proper Legislative Functions"
It is not true that the legislator has absolute power over our persons and property. The existence of persons and property preceded the existence of the legislator...

It is not true that the function of law is to regulate our consciences, our ideas, our wills, our education, our opinions, our work, our trade, our talents, or our pleasures. The function of law is to protect the free exercise of these rights, and to prevent any person from interfering with the free exercise of these same rights by any other person.

America Needs An "Ethical Revolution"

Nick Provenzo at The Center for the Advancement of Capitalism writes about the crisis we're in and the solution (it's not government intervention and meddling).

So unlike the claims of some, the current crisis is not so much a battle between Wall Street and Main Street. The problem we face today rests on every street; it rests in our nation's unchallenged enshrinement of need as a virtue and its willingness to use government power to assuage that need. Instead of leaving people free to work toward improving their lives though their own efforts, we have created a system of perverse incentives; a system that has now collapsed as a system so-designed must.

What then is the answer to this panic? I hold that we simply ought to let the businesses that failed fail, expedite the liquidation of their assets at their current market value under streamlined bankruptcy laws, and once and for all remove our government from the business of creating perverse economic incentives.

Notice however that such a plan is not a serious proposal being debated within the halls of Congress. Instead we are told that we require more regulation of banking through "Financial Stability Oversight Boards," smaller CEO salaries, stricter business accounting rules, massive taxpayer-funded bailouts of banking, subsidies to borrowers, and perhaps most rich, we are told that we should expect our government to make money from it all as it essentially nationalizes the commercial banking sector. I'm sure the folks at Amtrak think that they are going to make money one day too, but institutions that respond to political wishes rather than the reality of the marketplace do not make money; they lose it and in our age they lose it to the tune of billions upon billions of dollars.

So for the market to be restored, we must first demand an ethical revolution, one that says that people have a right to their life, liberty and the freedom to pursue their own happiness, but not a right to claim the unearned or a right to have our government provide it for them. Our nation needs to learn a new mantra: Give us liberty, and death to government controls. (Read here at Center for the Advancement of Capitalism).

Weighing Michael Phelps Down With Weights

Quote of the week!

“If you bound the arms and legs of gold-medal swimmer Michael Phelps, weighed him down with chains, threw him in a pool and he sank, you wouldn't call it a ‘failure of swimming'. So, when markets have been weighted down by inept and excessive regulation, why call this a ‘failure of capitalism'?”

It's not Capitalism that has failed - it's government intervention and regulations that have ruined our economy. (Read Eamon Butler at Timesonline.com).

Atlas Shrugged Tells Obama: Hands Off The Economy!

The Economist has an interesting article about the rise in sale of Ayn Rand's very famous book "Atlas Shrugged" about the disappearance of the creators, inventors and businessmen from society as Socialism takes of America. They go to a secret location where they forge a capitalist society based on individualism, self-reliance and mutual respect for their abilities. It was and is an astounding novel that lit my life up at the age of 18 as I found in its pages a new way of looking at my life and the possibilities that were open to me if government left people alone to follow their dreams of achievement. The book is full of philosophical ideas - altruism versus individualism; capitalism vs government control of the economy and the idea that a government's role is the commitment to protecting Americans and the homeland and NOT meddling in our lives.

...Tellingly, the spikes in the novel’s sales coincide with the news (see chart). The first jump, in September 2007, followed dramatic interest-rate cuts by central banks, and the Bank of England’s bail-out of Northern Rock, a troubled mortgage lender. The October 2007 rise happened two days after the Bush Administration announced an initiative to coax banks to assist subprime borrowers. A year later, sales of the book rose after America’s Treasury said that it would use a big chunk of the $700 billion Troubled Asset Relief Programme to buy stakes in nine large banks. Debate over Mr Obama’s stimulus plan in January gave the book another lift. And sales leapt once again when the stimulus plan passed and Mr Obama announced a new mortgage-modification plan.

Whenever governments intervene in the market, in short, readers rush to buy Rand’s book. Why? The reason is explained by the name of a recently formed group on Facebook, the world’s biggest social-networking site: “Read the news today? It’s like ‘Atlas Shrugged’ is happening in real life”. The group, and an expanding chorus of fretful bloggers, reckon that life is imitating art.

Some were reminded of Rand’s gifted physicist, Robert Stadler, cravenly disavowing his faith in reason for political favour, when Alan Greenspan, an acolyte of Rand’s, testified before a congressional committee last October that he had found a “flaw in the model” of securitisation. And with pirates hijacking cargo ships, politicians castigating corporate chieftains, riots in Europe and slowing international trade—all of which are depicted in the book—this melancholy meme has plenty of fodder. (READ HERE)

Americans Can Watch as the Consequences of Big Government Unfold

I'm glad Barack Obama won the Presidency. I'm glad that his stimulus package passed. Don't get me wrong, I'm not looking forward to 4 years of government taking my money or watching the debt climb for my sons and grandchildren to deal with. No, I'm glad because maybe then Americans can finally see the difference between government control of the economy vs economic freedom; between living on paper money and having a sound currency backed by gold; between a paternalistic government taking care of your every need and self-sufficiency and the creativity and productivity that it brings.

I'm glad Obama is the leader of the greatest country ever devised by man because then maybe in the future we will be careful voters keeping in mind the ominous consequences. I thank the Republicans who did not vote for this "stimulus" binge. It is how they should always behave when confronted with the choice of government mass intervention in the economy and small government that leaves people alone to live their lives as they see fit. I'm not saying that McCain would have been better....he was no conservative, so yes I'm glad Obama won - a professed big spender who was raised at the knee of a socialist and worked in the socialist ghettos of Chicago. That's what we got: a socialist.

To regain a Capitalist country there are going to have to be some rude awakenings by many people in this beloved land of ours. There is a big difference between freedom and a government controlled economy; between the freedom to act according to your own judgement and the government telling you what to do and what's best for you; between Capitalism and Socialism.

We all have to learn government does not produce anything, and in fact does not do anything well; that most politicians, especially the ones who've been in Washington for a gazillion years are nothing but self-aggrandizing hacks on the take. Remember, the only really important job of government is the defense of our soil and Americans! We are all adults we don't need the nanny state to watch over us.

The problem is we need a better class of politicians. Perhaps, when things are so bad and Obama's fumbling attempts at leading are discovered for what they are - a drastic plunge to the left, a better type of person will step up. George Washington where are you when we need you?

Inching Our Way to a Government Controlled Economy

Alex Epstein has a piece he wrote at Telegraph.co.uk called "Shunning Capitalism Created the Market Tumult". (Read). Ayn Rand was an unflinching defender of free markets and below is Mr. Epstein's analysis of where the blame lies - and it's not with capitalism which is truly the "unknown ideal". Americans must defend the free markets and get government OUT of our lives.

"One of the methods used by statists to destroy capitalism," she wrote in The Voice of Reason, "consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary."...

Culprit number one is the Federal Reserve, charged with what Mason calls "running the real economy" - the illegitimate job of centrally determining how much money exists and how high interest rates are. It was the Fed that flooded the market with cheap money that went begging for a bubble to invest in.

Then there are the policies of government deposit insurance and "too big to fail," which encourage large banks to take short-term risks that taxpayers will be forced to bail them out of. And that's not even to mention the Community Reinvestment Act, Fannie Mae, and Freddie Mac.

Time after time, the American government gave special handouts to some Americans in the name of "promoting homeownership" or "financial stability," while forcing others to foot the bill.
This was manifestly the opposite of Miss Rand's view that men should deal with one another to mutual benefit via trade.

What was needed in the past and is still needed today is a political system solely dedicated to protecting the individual rights to life, liberty, and property against force and fraud...

Socialism: Done Many Times and Always Failed

With Obama's "$700 billion in New-Deal-style "public works" boondoggles" and his wanting to appoint a Car Commissar and inject more billions into our failed auto industry it appears that what we voted for in November is pure Socialism.

America! We the people are NOT socialists. We are individualists. When will we learn the lesson that Socialism is a failed system and that all it brings is poverty and chaos? How many times will we have to "try" it in order to understand that the government is not good at directing the economy. Government is force and needed to maintain order. It cannot plan the economy - individuals planning their own businesses and work make an economy work. We don't need to reinvent this wheel all we need to do is study history. For goodness sake, Mr. Obama, don't lead us down the old road of central planning. Will you ruin this country before we have time to rediscover the fact that Capitalism works because it is the individual making thousands of decisions based on what is beneficial for his life that works. Robert Tracinski explains this in his article "Car Commissar" at The Intellectual Activist.

...The real story of the bailout of the Detroit auto industry is not simply the waste of taxpayers' money on failing enterprises. Rather, the real news is Congress's apparent confidence that the way to revive Detroit is to impose central planning on the auto industry. This would be done by appointing a "car czar" empowered to "act as a kind of trustee with authority to bring together labor, management, creditors and parts suppliers to negotiate a restructuring plan. He or she also would be able to review any transaction or contract valued at more than $25 million."

The term "car czar" is not quite right. As a metaphorical description of the bailout, it evokes the right location—Russia—but the wrong era. "Car commissar" would be much more exact. Perhaps he will begin his work by issuing a five-year plan for the revival of the Big Three.

The Christian Science Monitor describes this as a comeback for "industrial policy." "The notion that government would pick economic winners and losers gained support among Democrats in the early 1980s, when it appeared that Japan, with its well-developed industrial policy, was America's No. 1 economic rival. The approach later lost its luster as the Japanese economy settled into a deep slump." And yet, here we are trying it again.

"Industrial policy" was always just an evasive euphemism used to describe the latest variation on the old theory of central planning. But central planning and nationalization of industries was a dead end when the old Soviet Russians tried it—and it is still a dead end now that Russia is trying it again.

The 20th century experimented with every possible variant of socialism. We had democratic socialism in Western Europe, totalitarian socialism in Eastern Europe, and fascist socialism in South America. We had atheistic socialism and we had "liberation theology." We had the "scientific socialism" of the Soviet central planners and the chaotic jungle socialism of the Khmer Rouge, who executed anyone with an education. We had "socialism with Chinese characteristics" and socialism with African characteristics and socialism with Hindu characteristics.

We tried it all, and every time it led to poverty and oppression. Those results have been proven with scientific thoroughness. There is no excuse for trying it all again.