Here We Go Again

Once again, we have a financial crisis, and once again, the American lemmings are rushing off the cliff to our destruction, running to our nanny government for help.  With some combination of the media, creative historians, misinformed voters, our government monopoly schools, and opportunistic politicians, we just never seem to benefit from the lessons of history.

We all know that there was a financial crisis starting in 1929.  We know that President Franklin Delano Roosevelt cared about the people and used the Federal government to try to end their problems, and we all know that the Great Depression ended many years later in the 1940's.  Unfortunately, only a few economists and their students know just how counter-productive FDR's actions were and how much his intervention prolonged the misery of the American people.

Also, few of us seem to notice or care that we have been caught for decades in the expensive quagmires of the Wars on Poverty, Drugs, and Illiteracy.  We have no exit plans, victory is not at the end of any tunnel, and our efforts are producing as many negative consequences as positive ones.  But, government is still considered by many to be the best of all possible solutions to any situation.  Many are convinced that our only problem is that we need a lot more government regulations in all areas--that is, we need an even higher level of fascism than we already have.

So, now we face some serious financial problems and our only plan is to call them crises so we can invoke the "wonderful" problem-solving capabilities of the Federal government.  To get a perspective on how this "crisis" could end, we only need to go back two decades to the Savings & Loan debacle.  For years prior to 1986, our elected representatives to the Federal government used tax incentives to buy votes and encourage investment in real estate held for rental purposes.  The tax breaks resulted in artificially inflated prices on all investment real estate.  Then, in 1986 these tax incentives were eliminated after first being reclassified as tax loopholes for the "evil" rich.  In the absence of the incentives/loopholes, the artificial part of prices on all investment real estate disappeared immediately.  That is, the value of this type of collateral being held by the S&Ls dropped by 25%-30% instantly upon passage of the 1986 tax law.

That was the coup de grâce for the S&Ls.  They had been buffeted by so many government regulations for so many years that many of them were already struggling to stay solvent.  When the real estate investors walked from their devalued investments after 1986 and returned the devalued collateral to the lenders, almost everyone lost.  The taxpayers and anyone interested in freedom took a hit, the "evil, greedy" owners of the S&Ls got blamed and punished, but the Senators and Congressmen who "solved" the problems they caused got re-elected--with raises.

Today, we have some more financial problems.  Once again, the Marxists among us will maintain that these problems are just one more proof that capitalism does not work and that we need more government regulation.  Millions of Americans have already agreed with Senator Obama or Senator McCain when they stated their versions of the American fascist slogan, "There ought to be a law..."  The fallacy is that we do not have capitalism, and today's problems prove once again that socialism and fascism do not work.  Almost all of our schools are socialist (businesses owned by the government), and our "privately owned" businesses suffer from so many regulations that the ownership is only nominal and the over-regulation amounts to fascism.

Our country's founders mandated that the best way "to promote the general welfare" is through a severely limited republic.  When will we ever insist that our government get involved only in the areas permitted to it by our not-a-living-document Constitution?  When will we ever learn from history so we can stop repeating it?
 

Durham Ellis is the author of Big Government... Poor Grandchildren
Once again, we have a financial crisis, and once again, the American lemmings are rushing off the cliff to our destruction, running to our nanny government for help.  With some combination of the media, creative historians, misinformed voters, our government monopoly schools, and opportunistic politicians, we just never seem to benefit from the lessons of history.

We all know that there was a financial crisis starting in 1929.  We know that President Franklin Delano Roosevelt cared about the people and used the Federal government to try to end their problems, and we all know that the Great Depression ended many years later in the 1940's.  Unfortunately, only a few economists and their students know just how counter-productive FDR's actions were and how much his intervention prolonged the misery of the American people.

Also, few of us seem to notice or care that we have been caught for decades in the expensive quagmires of the Wars on Poverty, Drugs, and Illiteracy.  We have no exit plans, victory is not at the end of any tunnel, and our efforts are producing as many negative consequences as positive ones.  But, government is still considered by many to be the best of all possible solutions to any situation.  Many are convinced that our only problem is that we need a lot more government regulations in all areas--that is, we need an even higher level of fascism than we already have.

So, now we face some serious financial problems and our only plan is to call them crises so we can invoke the "wonderful" problem-solving capabilities of the Federal government.  To get a perspective on how this "crisis" could end, we only need to go back two decades to the Savings & Loan debacle.  For years prior to 1986, our elected representatives to the Federal government used tax incentives to buy votes and encourage investment in real estate held for rental purposes.  The tax breaks resulted in artificially inflated prices on all investment real estate.  Then, in 1986 these tax incentives were eliminated after first being reclassified as tax loopholes for the "evil" rich.  In the absence of the incentives/loopholes, the artificial part of prices on all investment real estate disappeared immediately.  That is, the value of this type of collateral being held by the S&Ls dropped by 25%-30% instantly upon passage of the 1986 tax law.

That was the coup de grâce for the S&Ls.  They had been buffeted by so many government regulations for so many years that many of them were already struggling to stay solvent.  When the real estate investors walked from their devalued investments after 1986 and returned the devalued collateral to the lenders, almost everyone lost.  The taxpayers and anyone interested in freedom took a hit, the "evil, greedy" owners of the S&Ls got blamed and punished, but the Senators and Congressmen who "solved" the problems they caused got re-elected--with raises.

Today, we have some more financial problems.  Once again, the Marxists among us will maintain that these problems are just one more proof that capitalism does not work and that we need more government regulation.  Millions of Americans have already agreed with Senator Obama or Senator McCain when they stated their versions of the American fascist slogan, "There ought to be a law..."  The fallacy is that we do not have capitalism, and today's problems prove once again that socialism and fascism do not work.  Almost all of our schools are socialist (businesses owned by the government), and our "privately owned" businesses suffer from so many regulations that the ownership is only nominal and the over-regulation amounts to fascism.

Our country's founders mandated that the best way "to promote the general welfare" is through a severely limited republic.  When will we ever insist that our government get involved only in the areas permitted to it by our not-a-living-document Constitution?  When will we ever learn from history so we can stop repeating it?
 

Durham Ellis is the author of Big Government... Poor Grandchildren