Category Archives: Economy

Update II: Bush & The Bailout Bandits

Affirmative Action, Classical Liberalism, Economy, Federal Reserve Bank, Ilana Mercer, Inflation, The State

Here’s an excerpt from my new WND column:

“A crisis that was created by cheap credit must be corrected by less of the same. … How does a bankrupt person become solvent? He ceases to borrow and spend, pays down what he owes and lives within his means. But Bush and the bailout bandits (here I include Obama and McCain, who’re down with destroying the economy too) would like you to believe such eternal verities do not apply in macroeconomics.

Bush’s idea of a correction is thus to ‘free banks to resume the flow of credit to American families and businesses.’ In the man’s own crazed words!

Those who buy the Bush bailout are – to use the incomparable Paul Gottfried’s coinage – ‘at least as dumb as turkeys, the mouths of which have to be shut when it rains, lest they swallow too much water and drown.'”

An unlovely snapshot of candidates Obama and McCain. …”

The complete column, “Bush & The Bailout Bandits,” is now up on WND.

Update I (September 26): To Robert and all my readers: Surely you know by now that if my image is not on the WND masthead, my weekly column is still on the Commentary Page? If you don’t see my image up on the WND nameplate, please look for it on the Commentary Page. My image is more often than not up there, but, since there are more commentators than slots, there is a rotation. On my new website, ready to launch any day now, you will be able to sign up for the weekly newsletter.

Update II (September 27): I would not ordinarily publish a letter, such as Tom’s hereunder, urging—in the face of all that has been written by this writer—more counterfeiting of the currency, debasement of the coin, and inflation of the money supply. Fraud all. Criminal too. With respect, Tom and his idol “Mort” do not understand a thing about money and the economy. However, this might be an opportunity for Tom and others to study further. (Mort of the halls of power is a goner.) I count on our classical liberal readers to recommend a few classics by Rothbard, Mises, and others. But Tom may want to reread “Bush & the Bailout Bandits,” and move on to the following:

“Dubya the Devaluer”

“US In The Red And Getting Redder” (Note the Chinese’s response to the threat of inflation: exactly opposite to ours. They’ve hindered lending and made living high on the hog harder.)

“Politicians: Stop ‘Stimulating’ In Public”

“Inflation 101 for Women Pundits & Other Tyrants”

“The Central Bank’s Game is the Same, Whoever’s the Name”

“Canadian Finance Ministry Pulling Bank Strings as Election Looms“

Updated: Mad Mahmoud Saner Than Bailout Bastards

Economy, Federal Reserve Bank, Inflation, Iran, Socialism

Who’s crazier; Mad Mahmoud Or the Bailout Bastards?

Ahmadinejad’s God gobbledygook aside, the Iranian loon has figured out something the newly crowned King Henry (Paulson) and his cronies reject root-and-branch:

“‘The U.S. government has made a series of mistakes in the past few decades,” Ahmadinejad said an interview with the Los Angeles Times. ‘The imposition on the U.S. economy of the years of heavy military engagement and involvement around the world … the war in Iraq, for example. These are heavy costs imposed on the U.S. economy.’”

“‘The world economy can no longer tolerate the budgetary deficit and the financial pressures occurring from markets here in the United States, and by the U.S. government,’ he added.”

Economist Robert Higgs has pegged all defense-related spending—the price of America’s empire—at approximately $1 trillion per year. That, and this, will do it.

Update: “THIS MASSIVE BAILOUT IS NOT THE SOLUTION, IT IS FINANCIAL SOCIALISM, AND IT IS UN-AMERICAN.” Who is Jim Bunning? He’s the only politician (other than Ron Paul) to have called the hideous thing by its name: socialism.

Senator Jim Bunning’s statement at the “Banking, Housing, and Urban Affairs Committee Hearing on Turmoil in the U.S. Credit Markets”:

“We cannot make bad mortgages go away. We cannot make the losses that our financial institutions are facing go away. Someone must take those losses. We can either let the people who made bad decisions bear the consequences of their actions, or we can spread that pain to others. And that is exactly what the Secretary proposes to do – take Wall Street’s pain and spread it to the taxpayers. The plan has not even passed, and already Americans are paying for it because of the fall in the dollar as a result of all the new debt we will be taking on.

I know there are problems in the financial markets, and I share a lot of the same concerns that our witnesses do. However, the Paulson plan will not fix those problems. The Paulson plan will not help struggling homeowners pay their mortgages. The Paulson plan will not bring a stop to the slide in home prices. But the Paulson plan will spend 700 billion taxpayer dollars to prop up and clean up the balance sheets of Wall Street. This massive bailout is not the solution, it is financial socialism, and it is un-American.” [My emphasis]

Updated: Prophet Paul & Good Guy Glenn (Beck)

Economy, Federal Reserve Bank, Inflation, Media, Ron Paul, Socialism

More TV traitors, who condemned and cussed Ron Paul, are calling on him to explain what he has been predicting vis-à-vis the consequences to markets of the government’s reckless squandering and its monetization of debts and deficits.

Glenn Beck is, naturally, no traitor, he’s a patriot—the only man on TV who gets it and is honestly grappling with the truth. Beck challenges the liars, and takes no nonsense from pols pretending to be good guys. He’s the only TV talker on whose show you’re likely to hear sentences and sentiments such as, “Where is that in the Constitution?”

Here is Beck’s latest interview with Paul, via New Liberty. The reality is BAD, but Paul is sounding better and better by the day. Transcripts are here.

Update (September 23): Sadly, Good Guy Glenn has joined the bad guys. He informed his devotees last night that, over the weekend, he had been beefing up on “editorials,” and had come to the conclusion that socializing whole industries was a necessary evil. Said Glenn:

“The $700 billion that you`re hearing about now is not only, I believe, necessary, it is also not nearly enough, and all of the weasels in Washington know it. … The bailout — I see this as just stopping the plane from falling out of the sky.”

Peter Schiff, President of Europaca, who is clearly libertarian (and Austrian on economics), tried to reason with Glenn:

“Now the problem is our pilot and our co-pilot, Bernanke and Paulson, don’t know how to fly. I mean, they’re blind. They’re drunk.
You know, they’re going to crash this plane even faster. You know, the bailout is actually going to make it worse because we don’t have the $2 trillion. We’re just going to print it up.
Instead of just the entire economy coming down, we’re going to take our currency and we’re going to have a much bigger crisis when our money isn’t worth anything and interest rates are double digits because nobody will lend us any more.”

AND:

“The government’s not going to save us. They did this to us. They’re the ones that created the greed by eliminating all the risks of mortgage lending in the first place. They say we have to do this, they say we have to go into Iraq because they had weapons of mass destruction. They were wrong. This plan is a weapon of mass destruction to destroy our economy and to destroy our currency.”

I say fire Treasury Secretary Hank Paulson, who, before joining the Byzantine bureaucracy, had a $40 million per-annum job on Wall Street. Hire Schiff.

More from wise man Schiff:

“The government is just borrowing and spending more money. They’re not letting the market fix the problem. And how are we going to get out of this mess with more government, with more inflation?
As bad as this collapse would be, this is going to make it worse. Doing something different would be shrinking government.”

But Glenn let the wise guys—the State’s stool pigeons—have the last word, which he then seconded.

Updated: Predicted Meltdown

Business, Communism, Economy, Government, Ilana Mercer, Inflation, Private Property, Socialism, The State

The brilliant Bob Higgs on the crumbling capital markets (read my comments following the “Snip”):

“The failure of Fannie Mae and Freddie Mac, setting in motion the biggest government bailout/takeover in U.S. history, brings a grim sense of fulfillment to competent economists. After all, what did people expect, that water would flow uphill forever?

This financial mega-mess is the same sort of event as the collapse of the USSR’s centrally planned economy, another economically unworkable Rube Goldberg apparatus that was kept going, more or less badly, for decades before it fell apart completely. Along the way, of course, famous (yet actually unsound) economists assured the world that everything was working out splendidly. As late as 1989, when the pillars were crumbling on all sides of the temple, Nobel Prize winner Paul A. Samuelson informed readers of his widely used textbook, “The Soviet economy is proof that . . . a socialist command economy can function and even thrive.”

In the future, we will see a similar breakdown of the U.S. government’s Social Security system, with its ill-fated pension system and its even more inauspicious Medicare system of financing health care for the elderly. These government schemes are fighting a losing battle against demographic realities, the laws of economics, and the rules of arithmetic. The question is not whether they will fail, but when—and then how the government that can no longer sustain them in their previous Ponzi-scheme form will alter them to salvage what little can be salvaged with minimal damage to the government itself.

Our political economy is rife with such catastrophes in waiting, yet the public always seems startled, and outraged, when the day of reckoning can no longer be deferred, and another apartment collapses in the state’s Hotel of Impossible Promises, loading onto the taxpayers more visibly the burden of sheltering the previous occupants.

Call it democracy in action or utterly corrupt governance; they are the same thing.

Each of these time bombs has at least one element in common: it promises current benefits, often seemingly without cost; but if it must acknowledge a substantial cost, it places that burden somewhere in the distant future, where it will be borne by somebody else. From the standpoint of society in general, every such scheme is a species of eating the seed corn. It satisfies the public’s appetite to consume something for nothing right now, with no thought for the morrow. It represents the height of irresponsibility by permitting people to live higher today than they can truly afford, financing this profligacy by borrowing recklessly and by taxing politically weak and ill-organized people in order to shower benefits on politically strong and well-organized special interests. …

The architecture of the Hotel of Impossible Promises is not arcane. All competent economists understand these things. Ludwig von Mises explained as early as 1920 why a centrally planned economy could not work as a rational system of allocating resources. The reasons why Social Security, especially its Medicare component, and many other such government programs contain the seeds of their own destruction have been explained time and again. Are the politicians who construct these structures really such idiots that they cannot understand the logic of what they are doing? Not at all. …”

[Snip]

The complete article is “Ticking Time Bomb Explodes, Public Is Shocked.” Read it. I disagree with the sentiment expressed in the last paragraph. Bob Higgs would find it hard to comprehend how stupid the corporate, political and academic elites truly are. This is the age of the idiot. Obama is an ass with ears. Ditto McCain. Take them at face value, Bob. Believe their idiocy. As hard as it may be for a man of your intelligence to grasp, they truly do not understand Mises and Hayek and Rothbard or even Friedman. The idea that misallocation of capital is inevitable in socialized systems is anathema to the incontinent legislators and the other cognoscenti. Psychologizing about their motives gives these intellectual tabula rasa more credit than they deserve. (Michael Rebmann of “North Buffalo Journal and Review” liked this rant.)

Update: I just saw CNN’s Campbell Brown, who, as I already noted, is not working with much, and her panel, laud the massive bailouts. Why? Because, as all agreed, the returns on this “investment” will be many times the investment. This is beyond rank utilitarianism. The concept of private property eludes Campbell and her commies. The risks in a bailout are socialized and the profits privatized. Theft is what this is all about–unconstitutional, criminal taking.