I am not sure if people will deem it lunacy or not, nor do I care. I feel this is important enough to spread, and I would suggest many people (especially Americans) to take some time to get a bit deeper into this.
The Austrians Were Right
Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.
Except for a rare few, Members of Congress are unaware of Austrian Free Market economics. For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics. If they had had any understanding of the Austrian economic explanation of the business cycle, they would have never permitted the dangerous bubbles that always lead to painful corrections.
Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.
At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form. Congress added fuel to the fire by various programs and institutions like the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD mandates, which were all backed up by aggressive court rulings.
The Fed has now doled out close to $2 trillion in subsidized loans to troubled banks and other financial institutions. The Federal Reserve and Treasury constantly brag about the need for “transparency” and “oversight,” but it’s all just talk — they want none of it. They want secrecy while the privileged are rescued at the expense of the middle class.
It is unimaginable that Congress could be so derelict in its duty. It does nothing but condone the arrogance of the Fed in its refusal to tell us where the $2 trillion has gone. All Members of Congress and all Americans should be outraged that conditions could deteriorate to this degree. It’s no wonder that a large and growing number of Americans are now demanding an end to the Fed.
The Federal Reserve created our problem, yet it manages to gain even more power in the socialization of the entire financial system. The whole bailout process this past year was characterized by no oversight, no limits, no concerns, no understanding, and no common sense.
Similar mistakes were made in the 1930s and ushered in the age of the New Deal, the Fair Deal, the Great Society and the supply-siders who convinced conservatives that deficits didn’t really matter after all, since they were anxious to finance a very expensive deficit-financed American empire.
All the programs since the Depression were meant to prevent recessions and depressions. Yet all that was done was to plant the seeds of the greatest financial bubble in all history. Because of this lack of understanding, the stage is now set for massive nationalization of the financial system and quite likely the means of production.
Although it is obvious that the Keynesians were all wrong and interventionism and central economic planning don’t work, whom are we listening to for advice on getting us out of this mess? Unfortunately, it’s the Keynesians, the socialists, and big-government proponents.
Who’s being ignored? The Austrian free-market economists—the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today. If the crisis was predictable and is explainable, why did no one listen? It’s because too many politicians believed that a free lunch was possible and a new economic paradigm had arrived. But we’ve heard that one before--like the philosopher’s stone that could turn lead into gold. Prosperity without work is a dream of the ages.
Over and above this are those who understand that political power is controlled by those who control the money supply. Liberals and conservatives, Republicans and Democrats came to believe, as they were taught in our universities, that deficits don’t matter and that Federal Reserve accommodation by monetizing debt is legitimate and never harmful. The truth is otherwise. Central economic planning is always harmful. Inflating the money supply and purposely devaluing the dollar is always painful and dangerous.
The policies of big-government proponents are running out of steam. Their policies have failed and will continue to fail. Merely doing more of what caused the crisis can hardly provide a solution.
The good news is that Austrian economists are gaining more acceptance every day and have a greater chance of influencing our future than they’ve had for a long time.
The basic problem is that proponents of big government require a central bank in order to surreptitiously pay bills without direct taxation. Printing needed money delays the payment. Raising taxes would reveal the true cost of big government, and the people would revolt. But the piper will be paid, and that’s what this crisis is all about.
There are limits. A country cannot forever depend on a central bank to keep the economy afloat and the currency functionable through constant acceleration of money supply growth. Eventually the laws of economics will overrule the politicians, the bureaucrats and the central bankers. The system will fail to respond unless the excess debt and mal-investment is liquidated. If it goes too far and the wild extravagance is not arrested, runaway inflation will result, and an entirely new currency will be required to restore growth and reasonable political stability.
The choice we face is ominous: We either accept world-wide authoritarian government holding together a flawed system, OR we restore the principles of the Constitution, limit government power, restore commodity money without a Federal Reserve system, reject world government, and promote the cause of peace by protecting liberty equally for all persons. Freedom is the answer.
"You would think that a 39 city protest involving thousands of people might warrant a national wire story, maybe a mention on cable news, but no. Reporters don't understand the issue and therefore they ignore it. Of course this can be said for most of the important issues that affect people's lives. Hence we get wall-to-wall coverage of the Obama daughter's educational preferences. Fiddling while Rome burns seems almost understated."
P.S.: If a mod can turn this picture into a thumbnail so it doesn't mess up the proportions of the page, please feel free to, I don't know how.
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I like this guy. Commodity based monetary system is natural, and is not a bad thing. Gold standard was not without flaws, slow but constant deflation was an issue, and overproduction crises occurred repeatedly, but they were nothing compared to great depression, and economy easily recovered after them by itself.
Besides, I remember there was an initiative somewhere in the US to create credit/trust-based money in local communities, which I find very interesting.
As for central banking and fiat money, as long a central bank is a transparent, regulated and public institution, whose only aim is to adjust the money supply to real economic conditions, it can work nicely. But this of course makes any idiotic monetary stimulus impossible, and bars the way to inflating the markets. Thank God that Polish central bank and banking regulations are one of the few things I can be relatively proud of in my country.
Oh, and Austrian school ftw!
On the global government, if it emerges due to a voluntary agreement of nations as a loose federation of some sort, I am all for it, but this will not be the case until I am a very, very old man, if I am lucky.
Any global government that arises now would be very far from being either voluntary or stable.
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Understanding is a three-edged sword.
Moonlith, what I don't understand is how you can be an eco-socialist and a Ron Paul supporter at the same time. Ron Paul is probably the biggest advocate of laissez-faire on either side of the Atlantic.
But he did get a lot of things right. But he got a few things wrong. The gold standard, for instance, is not a good idea. Neither is complete government non-interventionism in the economy (for instance, to protect the environment). The market can fail. It does not do so often, but it can.
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Quote:Moonlith mate, can you resize the pic and post it again, cuz the site stretched and it's pretty uncomfortable to read now
P.S.: If a mod can turn this picture into a thumbnail so it doesn't mess up the proportions of the page, please feel free to, I don't know how.
If that's impossible I may have to resize it myself and host it temporarily on Imageshack.
Quote:Moonlith, what I don't understand is how you can be an eco-socialist and a Ron Paul supporter at the same time.
I never said I agree with his idea that Capitalism is good. But I even more disagree with incompetent retards being in power in the most powerfull nation in the world.
At the very least I can respect him because he is competent and actually KNOWS what the hell he is talking about. I don't believe for one second ANY of the other presidential candidates did.
Moreover, he believes in international non-interventionalism. Which is ABOUT snowING TIME!!!
By the way, by stating you don't believe COMPLETE economic non-interventionalism is good, you basicly admit you cannot trust people in a free-market system.
It's not a question of trust. I know how they would behave in a completely laissez-faire system, and while it would work for most things, there is the occasional market failure, and occasional market inefficiencies. Make no mistake, though. I favor government intervention to make the market more efficient, not to hamper it.
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It's a shame that you people actually fall for this Laissez-faire crap.
Would you react the same way if the Mafia told you the same after a crisis in court time and jail space, claiming that the state should leave things to the free play of the forces? Because the problem with an economic laissez-faire is the difference between the players. Do you really want the bigger companies getting bigger even faster and that the direction society is taking economically is even more ruled by companies whose main goal is to make a maximum profit and no matter the consequences?
If we want to control the dangers of global heating and others for our continued survival, if we don't want tax oases and worldwide economic crime and fraught, if we want to control the way the bigger part of the world population is industrializing as well, then we have no other choice than a world government, and if it is to be no joke it will need power as well.
What we actually don't need is a continued brainwashing by consumption-advertisement yelling about how you have to SPEND MONEY for trash no one needs.
I mean, just look at the world, and not only the 3rd world. It's about time we get our act together and bundle forces to actually work for a cause and not for the right to eat a McCrap at every corner of the street.
[ontopic] Well i think it is mostly correct, but since i don't live in USA nor is a part of the financial big wheel and system along with the fact i never was educated nor bothered to learn how exactly the wheel was going around i don't really know. I do not really know about Austria either, but it seems to be fitting to the fasion of change. So i guess attempting to find a way to remove the bubbles would be a solution anyway. [/ontopic]
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posted November 23, 2008 02:38 PM
