My friend Leslie Carbone was Booted from White House Conference Call.
By the way, Leslie is the author of Slaying Leviathan: The Moral Case for Tax Reform, which will be published in May 2009. I can’t wait.
Tag: United States government
Wall Street Crisis Fruit of Government, Not Free Markets
Radley Balko writing about the activities of the United States Government in Reason Magazine:
Many commenters have blamed all of this on capitalism. This isn’t capitalism. It’s a peculiar kind of corporatist socialism, where good risks and the resulting profits remain private, but bad risks and the resulting losses are passed on to taxpayers. There’s nothing free-market about it.
Bailout Raises Libertarians’ Market Value
“The specter of the most titanic intervention in the markets since Franklin Roosevelt started sewing the safety net has folks at the Cato Institute reaching for something strong.” See Bailout Raises Libertarians’ Market Value in the Washington Post.
Also from the Cato Institute:
Because of their quasi-governmental status, there is a market perception that Fannie Mae and Freddie Mac mortgage-backed securities and debt carry an implicit federal guarantee against default. Hence, the GSEs expose the federal taxpayer to an ever-increasing potential contingent liability that could ultimately cost tens of billions of dollars to rectify.
When was this written? A week or two ago?
It’s from 1997. See The Mounting Case for Privatizing Fannie Mae and Freddie Mac.
Rotten Paper, Toxic Paper
Pat Buchanan’s take on the current financial crisis. See Day of Reckoning.
The Bailout Reader
The Ludwig von Mises Institute has compiled The Bailout Reader, a collection of articles relevant to the current situation.
Not all these articles are from the past few weeks, as Austrian economists have long understood the dangers of government interventionism, the fruits of which we see today.
The events taking place in the financial market offer an illustration of the soundness of the Austrian theory of money, banking, and credit cycles, and Mises.org is your source not only for analysis of these events but also the economic theory that helps explain what is happening and what to do about it.
Click here to access The Bailout Reader.
Ron Paul’s Wisdom on the Current Financial Crisis
Ron Paul writes My Answer to the President, noting that the “financial meltdown the economists of the Austrian School predicted has arrived.” He introduces a quotation from Hayek this way:
F.A. Hayek won the Nobel Prize for showing how central banks’ manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day — and which are being proposed, just as destructively, in our own.
In my opinion, a great danger we face is that just as the Great Depression lead to Roosevelt’s huge expansion of government, so too this current situation will lead to similar expansion of government power. This has already happened with the Federal Reserve system.
I urge you to read My Answer to the President by Ron Paul.
Is There Anyone Left to Pay Taxes?
The Tax Foundation reports that soon nearly half of the tax returns filed will owe no federal income tax, according to the economic plans of John McCain and Barack Obama.
In its analysis Both Candidates’ Tax Plans Will Reduce Millions of Taxpayers’ Liability to Zero (or Less), the Tax Foundation reports that McCain’s announced tax reforms will result in 43 percent of tax returns owing no federal income tax. Obama’s would result in 44 percent.
Is this huge number of zero-income tax payers good public policy? Is it wise to have so few tax payers and so many tax consumers? I believe that taxation is wrong and needs to be drastically reduced, if not eliminated. But if we must have taxation, it needs to be fair, and to touch all people. Writing in a letter to the Wall Street Journal recently, M. Todd Henderson of the University of Chicago Law School wrote this:
The downside of a tax system of givers and takers is that people who don’t pay for things care less about them. When I was a management consultant working with a nonprofit client, I asked my boss why we made the client pay for a portion of our relatively expensive fees. He told me that having some “skin in the game” makes the client care more about the project, makes us care more about delivering value to them, and keeps the relationship one of mutual respect. The analogy to citizens and government is plain. Low-income taxpayers, like the nonprofit client, will simply care less about tax policy, wealth redistribution, and the growth of the welfare system if they aren’t paying for it. Making everyone pay, even if just a little bit, reinforces the Founders’ notion of “We the People” by making us all financially responsible for the government we have.
Laissez faire in Washington? On what planet?
Sheldon Richman of the Foundation for Economic Education contributes analysis of the current economic situation in the article Government Failure. A few quotes:
Laissez faire in Washington? On what planet? Governments at all levels have regulated the financial industry from the time of the founding. …
At the Division of Labour blog, economist Lawrence H. White asks: “What deregulation have we had in the last decade? Please tell me.” …
What about greed? Here White also has something important to say: “If an unusually large number of airplanes crash during a given week, do you blame gravity? No. Greed, like gravity, is a constant. It can’t explain why the number of crashes is higher than usual.” Likewise, greed (however you define this essentially useless concept) can’t explain the current economic troubles. Why didn’t these troubles occur earlier? Were people less greedy then? …
What about irresponsibility? Now we are getting to the crux of the matter. There was irresponsibility — but only because the government for decades has pursued a policy of relieving big companies of the responsibility that otherwise would have been imposed by market discipline and competition. …
Good intentions count for nothing in this context. The laws of human action (praxeology) can’t be repealed or got around.
Praxeology. Ludwig von Mises has an explanation for everything, it seems.
Voters Want Less Pork, Even in Their Own District
From Voters Want Less Pork, Even in Their Own District, July 24, 2008 Wall Street Journal:
The Club for Growth recently conducted a nationwide poll on government spending, and the results were exactly the opposite of what most politicians have been saying for years. Voters are fed up with Washington’s out-of-control spending. Politicians aren’t representing the will of the people when they bring home the bacon. They are really representing the will of their special-interest cronies. And it’s not just conservative voters who feel that way. Voters across the board have finally found something they can agree on even if their elected officials can’t: It’s time to cut the fat, even if that means fewer projects for their own districts.