Central Economic Planning at its Worst
Last week, the Financial Crisis Inquiry Commission (FCIC) presented its results to the Financial Services Committee. As with most other politically-appointed commissions, the results of the FCIC's investigation were easy to predict. Established by the same congress that gave us national healthcare and with a majority of its members appointed by those who seek to solve every problem with more government intervention, it was no surprise that the commission's findings would favor increased government intervention in the economy. Minority members were not substantively involved in the commission's operations, and the commission attempted to exclude their dissenting views by granting them very limited space to do so.
However, even the minority members of the commission failed to consider the most important cause of the financial crisis, namely the Federal Reserve's loose monetary policy. Almost a century ago, in 1912, Ludwig von Mises published his great work The Theory of Money and Credit. This was the first systematic description of Austrian Business Cycle Theory (ABCT), which explains the origins of the business cycle in monetary expansion. This theory explains why so many businessmen make so many of the same errors at the same time. Yet not a single member of the commission undertook an analysis of the financial crisis from an Austrian economic viewpoint.
Instead, blame was placed on failures in financial regulation and corporate governance, excessive borrowing and risky investments, and expansion of subprime lending, among other factors. But none of these explanations can answer why this crisis occurred. Why was there excessive borrowing? Why was there an explosion of subprime lending? Why were there failures in corporate governance? Why did virtually no one except Austrian economists see this coming?
Without the Federal Reserve's massive expansion of credit throughout the 1990s and early 2000s, there could have been no excessive borrowing or explosion of subprime lending. Through easy credit, the Fed initiated the economic boom that created the dot-com bubble. When that bubble burst the Fed pumped additional liquidity into the system, which led to a new boom that created the housing bubble. And now the Fed's additional trillions of dollars in monetary pumping is creating yet another bubble. This is the exact opposite of stability in the marketplace and has nothing to do with free markets. It is central economic planning at its worst.
It is imperative that the historic record accurately reflect what actually happened. In the popular press we see columnists attempting to blame the financial crisis on the "small-government," "free-market" policies of President Bush. Hundreds of billions of dollars in stimulus payments, a $700 billion bailout program, and trillions of dollars of Federal Reserve credit facilities hardly represent small-government and free-market principles in action! On the contrary, these government interventions by both major parties demonstrate quite clearly our nation's acceptance of crony capitalism.
Schoolchildren today are taught the myth that Herbert Hoover was a small-government President who did nothing to stop the Depression, while the truth is exactly the opposite. Fed Chairman Bernanke failed to understand the true cause of the Great Depression, so his policy prescriptions to combat the current crisis are understandably flawed. Unless we confront and correct false economic rhetoric, truly understand the causes of the economic crisis, and do away with our loose monetary policy, we will find ourselves in ever more vicious business cycles.
Posted by Not Anti-military Per Se on 02/22/11 11:39 PM
I never looked at the internet until I saw RP in Presidential debate. Until then I found the internet to be a source of disinformation. RP mentioned "Austrian Economics" and my eyes were open to a world of hidden knowledge and truth.
The courage Ron Paul demonstrated during those debates, and throughout his public life, was and is, truly jaw dropping.
There are no greater heros of this age. Ron Paul stands among heros of all ages.
Not many things are more evident in this world of extreme corruption and lawlessness.
My bet is the DB is not right about his son, although it is NOT terribly damning to claim the son is not his father. Who is? (Needless to say I still have the highest regard for the DB.)
If you believe in God please pray for the safety and well being of Ron Paul and the work he has been engaged in. IMHO this ends the discussion.
Peace and Best Wishes in Human Action.
Reply from The Daily Bell
We are changing our mind about the son based on his post-election behavior. So the jury is out so to speak ...
Posted by Jsmith on 02/22/11 10:06 PM
Thank you Dr Paul. Thank you for opening my eyes and my brain. Unfortunately you are one of only a few in Congress that I can count on my fingers and toes that see the peril, and are doing something about it. Unfortunately I read a quote where this great nation is being taught a lesson in poverty. I salute you!
Posted by Anadianant on 02/22/11 02:43 PM
Thanks for the exhortation.
Running is for ordinary people. As is rhetoric.
May I suggest you drop the Ron Paul tints and read the Tao teh Ching.
I know a statesman when I see one.
Posted by Bionic Mosquito on 02/22/11 02:39 PM
error correction should read as follows:
I continue to laugh at those who question him. Whose integrity should be more in question: that of Ron Paul and his efforts to change the dialogue toward freedom and away from tyranny, or that of those who attempt to discredit him for various reasons as you do (as discredit is discredit)?
Posted by Anadianant on 02/22/11 02:38 PM
@ bionic Mosquito
I'm redesigning the world of technology with a sweeping range of radical breakthroughs that question the very basis of industrialization and it's attendant miseries.
Click to view link
Other than that, I've been guided and freely guide others onto an inward spiraling path, helping one become meta-aware and without fear. A Warrior path in the tradition of Gurdjieff's fourth way.
I also blog, boldly I hope, on the same issues I bring up here. Here:
Click to view link
I hope that satisfies the spirit of your query as I now understand it.
Posted by Lucy on 02/22/11 02:25 PM
Ron Paul is continually on target. Methodical & statesman-like. In all the drama, *still* never lead or sand-bagged into hyperbole. Uncommonly sturdy. Soul/guts intact. Changed? Ridiculous.
Emboldened and intensified, more like. Immediately into new session: co-introduces "End Afhgan war' bill and another 'End the Fed' bill. His interview rhetoric is even tougher than before given a stronger oversight position. His son introduces same and instantly breaks out & pounds away at history/constitutional principals(in fact he seemed to play it softer in campaign). As Ron Paul often states, the fight is against ideas. "You'll never win against the man of one book".
Certainly, as D-Bell points out, he has more pressure than ever, but remains steadfast the consummate statesman. Seems a VERY rare man. No befuddled courage there, kids.
Anadianant, get going man! Find it. Run. Don't just stand there, be a man of the people.
Posted by Bionic Mosquito on 02/22/11 01:24 PM
I asked: "Have you done as much?" You say the question is unfair.
How is the question unfair? I assumed nothing about you. I did not assume that you have not done as much. I only asked if you have done as much. This is a question just as open to a "yes" as it is to a "no".
I guess I understand the nature of the scam better than most. And if Ron Paul is somehow in on it, I can only hope his side wins.
The concern I have with him is not him, but those who see in him a chance for hope through politics. There is no hope through politics. Thus I go to your original statement: "Perhaps a university would be better than a 30 year seat in the house?"
His role is education, not politics. And in this role, he has been far more effective at changing the public dialogue toward freedom than any professor at any university in the last five years. Had he gone into teaching, he would have a voice in a community college in some town neither you nor I ever heard of. And he would have changed nothing.
The only hope for positive change is education. It only takes a reasonably engaged minority to prevail. The current system will fail because it must, and it will be replaced by something. Let's hope by then there is enough of a minority to make a difference. To achieve this, Ron Paul is doing more than most.
I continue to laugh at those who question him. Whose integrity should be more in question: that of those questioning Ron Paul and his efforts to change the dialogue toward freedom and away from tyranny, or that of those who attempt to discredit him for various reasons as you do (as discredit is discredit)?
Bring some facts, but the "fact" that he is not an effective politician (as you and Gilles, among others, love to point out) is frankly a badge of honor as far as I am concerned.
You do not need to answer any questions, but the burden of proof will sit on you and others like you. His effectiveness is well known and very much needed at this time.
Posted by Anadianant on 02/22/11 12:53 PM
@ Bionic Mosquitoe,
Unfair question since you do not know me and cannot in the space of a short reply here. But RP is a public figure. A pollutician has to be open to greater scrutiny. I'm not concerned with his personal anything. But no results. I hope you do understand the nature and magnitude of the scam well.
Reply from The Daily Bell
Ron Paul has perhaps ... changed? There is TREMENDOUS pressure on him, more perhaps than any other man on the planet right now. We don't blame him if he has ...
Posted by Gilles on 02/22/11 12:14 PM
Sorry for the typo "changing the direction"
Posted by Gilles on 02/22/11 12:09 PM
I am not sure how to say this but I am greatly disapointed in Ron.
I was under the impression that with his new position we would hear and see somekind of good results, but now it's all same old same old. The past is good to know but ganging the direction of it can be of greater importance, it is becoming clear that his position has zero weight to bring upon improvements or changes.
Posted by Bionic Mosquito on 02/22/11 10:43 AM
What would you have him do? Lead a pitchforks-on-parade march down Pennsylvania Avenue?
There will be NO positive change in the US without a change in the mindset of a meaningful minority of the population. Toward this, Ron Paul has done more than any American in recent memory.
Have you done as much?
Posted by Anadianant on 02/22/11 08:59 AM
@ EDD Aha! Awesome. Stanley Meyer was brilliant. Maybe we should team up.
Please see my design web-site linked below. All radical breakthroughs based on "resonant arch-itecture". Influenced by Schauberger, Tesla and Fuller. Extended their work in many cases.
Click to view link
Appreciate your interaction, even off this forum.
Posted by EDD on 02/22/11 08:41 AM
"Set the record straight?" Review history; compare RP's efforts to Lincoln, Kennedy, and others in the spotlight. They were silenced by the PE. And this only in the political field. Take Nicola Tesla; his financing was eliminated because you couldn't put a meter on his proposal. His name was stricken from our history books.
Or Stanley Meyer whom I knew personally for 14 years. Many think he was poisoned and died because he challenged the 'energy consortium". Had he been able to continue with his technology, we would be energy self sufficient today. No reliance on oil, and a completely 'non polluting' technology. The link provided, Click to view link , is just but one site describing his efforts.
BTW, Stan's technology is based on Tesla's research. From my perspective, the only way to win (at this time) is not to confront the powers that be, but to work within the system to meet the requirements set forth by regulations. I speak of this from personal experience and with information I am privy to regarding just how this may be accomplished.
Do we have time? This is all we have and the hope here is that the time granted will be enough to accomplish the goals set forth. To better understand my viewpoints regarding the concepts here, review my post on today's other article, Click to view link
I believe that those who are fighting the good fight will come through these trying times with victory, else I would not be expressing my viewpoints here.
Thanks for the dialogue.
Posted by Anadianant on 02/22/11 08:13 AM
Do we really have time for discourse anymore? Did we ever? Life is about non-doing, but in an active way, like a spinning top or a bow-string.
Perhaps we need un-varnished, un-political truth too. Ne? Quit congress and to prove that the first amendment is still alive, speak the truth to people's deepest questions.
he can quiet the entire CON-Spire-acy world with a few chosen answers. Set the record straight.
Where do you or I have the option or opportunity to get that close to the truth? We can only go inward and look at others who are doing the same and understand.
But Ron Paul and his ilk need to come clean. No double speak. Which is an oxymoron for a pollutician. Appreciate the civil dialouge! :-)
Posted by EDD on 02/22/11 06:59 AM
Please give the man a break. He is only one person, and we don't know his overall agenda except to say that through this forum, he is trying to educate. To maneuver through the maze that is political requires one to be very adept, and he deserves our prayers and support.
In support of this argument, quote R.P., "Minority members were not substantively involved in the commission's operations, and the commission attempted to exclude their dissenting views by granting them very limited space to do so."
That being said, I do appreciate your feedback as you illustrate the very conditions which have led us to this very situation.
Posted by ChuckE on 02/22/11 06:55 AM
You know,I and some friends have been wondering the same thing: what happened to the audit of Fort Knox? Is the gold gone? That is why the truth is being kept from us? It would crash the world economic system? Did they get to you Dr Paul?
Posted by Anadianant on 02/22/11 02:15 AM
Is your role that of a genial grampa teaching us about free markets and hard money? Perhaps a university would be better than a 30 year seat in the house?
Are you really, as an elected congressman not allowed access to Knox knox no one home, even if you asked forcefully? Were you in the house during Trafficant's 1993 speech that wasn't?
Is McFadden a hero of yours? or Lindbergh? Look where their truth-telling got them. Did their examples stifle the voice of truth for-ever?
Rand is in. Dynasty is safe. America on a death-bed. Wisconsin ona hair-trigger. And the CONgress can do is discuss?
Rather shocking who people will give their adoring, un-questioning right-to-think over to.
Seriously though, is the 10 FEMA district presidential order by Nixon urban legend? The 1933 war powers act emergency urban legend too?
Are you a part of the great charade? Knowingly or otherwise?
Give it to us inquiring minds Ron. We are grown up, can take it.
Enough of this professorial pedantry though, carrying coals to newcastle.
We are at a tipping point of giant proportions and generational impact. Truth, bitter or otherwise, much appreciated.
Click to view link
Posted by Bob on 02/22/11 12:29 AM
Let us be straight. The American ruling elite DOES NOT represent interests of American people. Rather they represent interests of the international central banking cartel. These cosmopolitan scoundrels behave more and more like Mubarak of Egypt or Gaddafi of Libya. America looks more and more like a police-state.
However, these SOB must see that all around world the security and oppression apparatus, at some moment after the citizens stops buying all these propaganda and lies, will be incapable of suppressing will of the people.