Blogs : DENNIS PATRICK: THE REAL CRISIS
By: Dennis Patrick
THE REAL CRISIS?
Our Founding Fathers cherished limited government. To them, this ideal was worth codifying in the Nineth and Tenth Amendments to the US Constitution. They understood Adam Smith’s "Wealth of Nations" published in 1776 and had personal experience with an economically oppressive government. From all appearances, and for whatever reasons, our current national leaders seem to be swerving leftward away from our Founding Fathers’ intent.
Our current crisis is a direct result of economic tinkering by the government. Mark-to-market asset valuation is a scheme imposed by the feds to fix a dollar value on bank assets. The Community Reinvestment Act is a law designed to force banks to lend to low income borrowers regardless of their ability to repay the loan. Fannie Mae and Freddie Mac are government entities created to guarantee risky mortgages banks were required to make to low income borrowers. In retrospect, these government creations served to make some federal political appointees very wealthy at taxpayers expense. Will we see Franklin Raines, former CEO of Fannie Mae, and Jamie Gorelick, former Vice Chair of Fannie Mae, frog-marched to prison like we did Ken Lay of Enron fame? All of them "cooked the books" for their own financial gain.
With government involvement in layer after layer of our business life, is it any wonder free markets have become a shibboleth? That airlines and banks are forced to merge or go broke? That denial of access to oil extraction has led to high oil prices? That government restriction on building new oil refineries lead to high gasoline prices? That government restrictions on the use of coal and nuclear energy keeps us from being energy independent? That government requirements for third party payers leads to spiraling health care costs? That government regulation of the auto industry has driven manufactures overseas to more friendly climes? If we are suffering economically, we have only our government and those who run it to thank.
Truth be told, the feds have been on the road to consolidating power for a long time. They have essentially nationalized much of public education. They’re now in the process of nationalizing the finance, insurance and mortgage industries. They’re knocking on the door of nationalizing the oil, auto and airline industries.
Our problem is not a free market problem nor is it a capitalism problem. Our problem is a problem of over regulation, i.e., over involvement by government. Even so, rouge pundits add insult to injury by trying to pin a bad rap on capitalism. Shame, shame!
Now, the very folks that got us into this current mess propose to use $700 billion of taxpayer money to “rescue” or “bailout” the “economy.” If they’d left well enough alone way back when, the economic situation would have resolved itself.
Never mind. In the same breath we’re told that this is the most important legislation in our lifetime. We’re told that the “economy” would collapse if this law was not adopted. So what does congress do? It sweetens the pot with another $150 billion in pork! No one guarantees this infusion will work. President Bush and Treasury Secretary Paulson are still working on a plan after the fact.
Then we’re asked to believe the government fairy tale that this “plan” will return money to “the taxpayers” with the sale of assets sometime in the future. Since when has the government ever followed through on a promise to return money, real money, to the very people from whom they took it whether rich or otherwise? Think about it. Where’s the government going to get the money to finance a greatly expanded bureaucracy to oversee and process and regulate all the bad debt and tangible assets it’s about to acquire?
Meanwhile, with no resolution in sight, the Social Security and Medicare crises, addressed only to the extent of partisan political bickering, lurks in the gloaming. They are the real war stoppers and no one wants to address them during their term in office. The political attitude is clear. “If you can’t stick the blame on your opponent, pass the buck to your replacement. Me first, country second.”
Adding to the silliness, we have one presidential candidate who advocates heaping more taxes on the “wealthiest Americans.” Brilliant! Who does he think has the cash to spend to keep money in circulation creating demand for goods and services? Or, to phrase it obliquely, “Have you ever tried to get a job from a poor guy?”
Face it. Government behaves very much like Robin Hood in reverse. It steals from the rich and keeps it to grow itself bigger.
The ideal of limited government is not arcane. It is stunning to realize how many believe that government is the solution to every problem rather than the problem itself. We have witnessed time and again that centralized government and centralized planning does not work. It gave us the Soviet Union. It gave us Cuba. It gave us North Korea. Are these the states we want to replicate? Despite the naysayers, this is very much about ideology. God bless our Founding Fathers!
The real crisis today is the crisis of the people’s confidence in their government.
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