Fomenting panic (UPDATED)
September 24, 2008 The Liberty Zone No CommentsYou know… I’m sick and tired of blogging about economics! I live, eat and breathe economics every day of my life here at the office, so blogging used to be my escape into other subjects, such as authoritarianism, nanny statism, gun control, etc. Unfortunately every day when I turn on the news, I hear another piece of asshattery being spewed by the ignorant, power-hungry morons this nation has put in power, and I’m compelled to write about economics yet again.
Listening to a replay of Bush’s speech this morning on Fox News, as he tried to convince the nation that if we don’t fork over a trillion dollars to reward idiots for making idiot decisions, we’d all wind up destitute and begging on the streets for a sandwich, made me want to hurl! The speech could be boiled down to one simple concept: “If you don’t shell out your tax dollars, the nation is doomed! DOOMED, I tell ya!” The only piece of rhetoric missing was a tie-in to terrorism and national security, and I’m waiting for that!
The government’s top economic experts warn that without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold:
More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.
In explaining how we got to this mess in the first place, he never ONCE placed blame where blame was due. He spoke of piss poor decisions without acknowledging the real culprit – GOVERNMENT REGULATION and lack of personal responsibility. “Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.” What he didn’t tell you was that government subsidized and regulated the housing market since the inception of Fannie and Freddie, which were created to ensure that more “minorities” got a chance to own homes. They were CREATED to monkey with the free market and provide loans to people who would not have otherwise received them due to poor credit ratings or the inability to pay. They were designed by governments to engineer a Brave New World – and yes, I AM referring to Huxley’s dystopia, where humans were engineered to desire specific products to ensure that manufacturers remained in business. Instead of letting the market check prospective borrowers to ensure that they were an acceptable risk, the government engineered two entities to hand out money willy nilly to practically any crackhead on the street, in order to create an “equitable” society, where everyone is somehow ENTITLED to home ownership!
Is it ANY wonder that this particular house of cards is collapsing? And is it any wonder that politicians are now scrambling to cover up the mess they have created over the decades?
McCain’s solution? You guessed it – create yet ANOTHER layer of bureaucracy to regulate a problem that was caused by regulation and governmental social engineering. McCain wants to create something called a Mortgage and Financial Institutions Trust “To ensure that people are able to stay in their homes and safeguard the life savings of Americans by protecting our financial system and capital markets.” And no, I’m not even kidding! The “Maverick” who claims to want to change things, simply wants to add another layer of what will no doubt be an expensive bureaucracy to regulate problems created by government in the first place. Oh, and did I mention that McCain’s idea of a free market is to ensure that this particular new bureaucracy has the authority to PURCHASE bad loans (at taxpayer expense, of course) should piss poor financial decisions once again cause a panic (fomented, of course, by politicians wanting to gain power).
Yeah, McCain is my guy! NOT! Not even Palin can rescue this pig, no matter how much lipstick you put on it. And if you’re wondering if I’m calling McCain a pig – DAMN STRAIGHT I AM! A statist pig, at that!
Bush claimed that this “crisis” is just too large, and these companies too important to the economy to be “allowed” to fail. Let me give you a clue: NO company is too important and too large to be allowed to fail. If its executives make piss poor decisions, they certainly shouldn’t be paid hundreds of thousands of dollars and allowed to continue running the company into the ground with poor fiscal policies while the government continues to reward them with billions in cash stolen from the taxpayers!
No. Friggin’. Way!
National emergencies, crises, panic… they’re all best friends of the statist swine whom we reward with our votes election season after election season. Emergencies allow them to show “leadership,” and when the market invariably corrects itself, which is something it would do with or without political interference, they can take credit and continue milking the tragedy and horror.
In his column yesterday, Dr. Walter Williams quoted H.L. Mencken. “The whole aim of practical politics is to keep the populace alarmed, and hence clamorous to be led to safety, by menacing it with an endless series of hobgoblins, all of them imaginary.” Sound familiar? If not, let your eyes wander up and re-read Bush’s words again.
Guess what, folks! I’m going to tell you exactly what Dr. Williams and other prominent economists have said, and I’m going to back it up with expert testimony from Dr. W. Michael Cox and Richard Alm, of the Federal Reserve Bank of Dallas. We are NOT facing a crisis!
The American economy is in a rough patch. But the long-term trends are good—and there is a price to economic pessimism.When a presidential election year collides with iffy economic times, the public’s view of the U.S. economy turns gloomy. Perspective shrinks in favor of short-term assessments that focus on such unpleasant realities as falling job counts, sluggish GDP growth, uncertain incomes, rising oil and food prices, subprime mortgage woes, and wobbly financial markets.
Yes, we have been experiencing a rough economic period. Is it a recession? No. Despite this rough patch, we’re still experiencing GDP growth, and our unemployment is at a very respectable 6 percent. But here’s the problem. If the politicians don’t foment panic, the sheep won’t clamor for the nanny state to lead them out of this so-called “crisis.” And if the sheep don’t baa for the nanny state, the politicians can’t get elected.
So when I tell you that things aren’t all that bad, despite the spoiled and the ignorant whining about a marked decline in their purchasing power or the fact that they can’t seem to make payments for that 72-inch LCD TV their kid wanted for his room, I point you to the experts’ analysis:
Income and wages are often used as gauges of progress, but consumption is the best measure of rising living standards. Products that began as luxuries only the rich could afford in time came within the means of just about all U.S. households In previous generations, telephones, cars, electricity, household appliances, and televisions made life better for the average American. In our times it has been computers, cell phones, Internet access, VCR/ DVD players, digital cameras, and more.
What are we seeing here? We’re seeing that the prevalence of items that were once considered “luxury” items has spread to more households now than ever. We are purchasing more and living better than ever before. Hell, even snot-nosed kids working at McDonalds after high school are toting around cell phones! Let’s gain a little perspective, shall we?
Yes, food prices have risen, as have fuel prices. This is a global phenomenon, not a national one. And, as Cox and Alm point out, we’re doing much better than we were, despite these cost increases. “For example,” they write, “in terms of time worked at the average pay rate, the real cost of a 12-item basket of basic foods has hardly budged. And while the work-time price of gasoline doubled in recent years, a gallon of gasoline still goes for less than 11 minutes of work. At 20 miles per gallon, an hour of work will get you 110 miles down the road; at 30 mpg, you can go 165 miles.” Not an altogether bad deal, now, is it?
So despite the dire predictions of the Bush administration, the histrionics of John McCain’s campaign suspension and the hysterical ramblings of the Obamacolytes about the need for more government regulation, it all comes down to the same thing: we’re not doing nearly as bad as the politicians would have you believe. However, if they didn’t engage in these economic and public relations acrobatics, they couldn’t portray themselves as the saviors of America’s society and way of life, and couldn’t gain more power over you!
I encourage you to read Cox and Alm’s analysis. They are Federal Reserve members, and they are telling you to get a goddamn grip! Take a look around you. Realize that we’re far from crisis stage, and do a little research to find out what and who really caused this recent economic downturn. As Dr. Williams (quoting Thomas Sowell) says, “we don’t look to arsonists to put out fires that they’ve created; neither should we look to Congress to solve the problems they’ve created.”
Think about that before you clamor for the politicians to rescue you!
UPDATE: I’m so angry, I’m not even in the mood to be snarky. I THOUGHT I had respect for Sarah Palin. I thought she was the true straight talker of the ticket. Turns out she’s just about as economically dumb (or desperate to gain power) as McCain. There’s not an honest one in the bunch, is there…
Republican vice presidential candidate Sarah Palin said Wednesday that the United States could be headed for another Great Depression if Congress doesn’t act on the financial crisis.
