Next up is Austrian economist Thomas J. DiLorenzo. Born 1954, DiLorenzo teaches American Economics at Loyola College in Baltimore, Maryland, a senior faculty member of the Ludwig von Mises Institute, and author/co-author of several books, most notably:
Well known for shunning the typical politically-correct line of thinking, his well-researched and masterfully eloquent works are eye opening to many whose only knowledge of political and economic topics resulted from the revisionist history often taught in government schools.
DiLorenzo is steadfast in his claim that the interventions of Herbert Hoover and Franklin Roosevelt exacerbated the economic problems of the 1930s and prolonged the Great Depression. As he wrote in the opening paragraph of The New Deal Debunked (again) (a followup to his earlier article A New, New Deal):
Quote of the Day: “The Constitution poses no serious threat to our form of government.” — Joseph Sobran
Subject: Should you pay autoworkers to do nothing?
If the history of the current era is ever written properly it may be called “The Age of the Government Sponsored Scam.” The examples are piling up. Here’s the latest . . .
Think of what this will mean if the politicians pass a bill to bailout GM, or Chrysler, or Ford. When you go to work you’ll be laboring part of the day to pay some members of the United Auto Workers union to sit and produce nothing.
Doesn’t that sound like a scam to you, and wouldn’t a bailout represent government sponsorship of this scam?
Do you think, perhaps, the Detroit automakers might not need a bailout if they didn’t sign such stupid contracts with the UAW union?
Do you think, perhaps, that the Democrats may ignore this problem unless they hear outrage about it from their constituents?
If you have Democratic representatives you may want to ponder whether they represent the unions, or you. Shouldn’t you ask them where their loyalties lie?
Or, if you have Republican representatives, do you think they might make an issue of this if you inform them of it?
Given the direction the political winds are blowing, with world leaders meeting to determine how best to further intervene into the world’s monetary and economic system, the odds of returning to the stable days of the Gold Standard seems infinitesimal at best. At the Christian Science Monitor, an op-ed titled Forget Bretton Woods II – we need a gold standard, editorialist Walker Todd says that absent the “integrity and restraint a gold standard provides” our country may be headed straight for hyperinflation. Using Weimar, Germany as an extreme example, he illustrated how desperate conditions could get:
Weimar Germany experienced one of the greatest inflations in modern history in 1922 and 1923. Eventually, the official exchange rate reached 4.2 trillion marks per dollar. Some Germans heated their homes by burning cash, since it was cheaper than buying wood. The inflation finally was tamed by government bonds promising repayment in gold, backed by land taxes also payable in gold.
And photographs from the situation in Zimbabwe illustrate clearly what could happen. Here’s a man going out to lunch: Read More »
Yesterday’s commentary by Peter Schiff is a must read. In “The Humpty Dumpty Economy“, Schiff suggests that Treasury Secretary Henry Paulsen is both a liar and incompetent. He explains the moral hazard, or unintended consequences of all this new regulation.
Before the current economic crisis became apparent to all, the most popular fable used to describe America’s uncanny economic resiliency was the story of Goldilocks. It was argued that our economy was skipping down a sunny path of moderate growth, low inflation and rising asset prices. However, a much better parable for our economy over the last decade would have been the story of Humpty Dumpty: a bloated, fragile shell perched on the top of a dangerously high stone wall. This week, all the government’s horses and all of its men scrambled to put Humpty Dumpty back together again. Here is a look at some of this week’s highlights:
The Mother of all Moral Hazards
No doubt prodded by the administration, Fannie Mae and Freddie Mac announced a new attempt to stop the fall in home prices and foreclosures through a loan modification program that would cap mortgage payments so that a homeowner’s total housing expenses would not exceed 38% of household income for home owners who are 90 days delinquent.
In a classic case of unintended consequences, the plan will encourage a massive new round of delinquencies and household income reduction as homeowners will jump through hoops to qualify for the program and maximize their benefit. Those who could conceivably economize to meet their existing obligations will now have a strong reason to forego such sacrifices. Those who are not 90 days past due will intentionally become so. In many cases, dual income families may decide to eliminate one job altogether as reduced mortgage payments combined with lower child care and other work related expenses will likely exceed the after-tax value of the lost paycheck.
Unfortunately, the last thing our economy needs is falling household incomes and even more bad debt. But that is precisely what this plan will give us.
Ron Paul was interviewed by Neil Cavuto on FOX News this morning regarding the G20 financial summit hosted by George W. Bush at the White House. I wish they discussed Bush’s sudden and recent championing of “free market capitalism”, but it was a bit more toward the standard Ron Paul rhetoric we have become used to.
He again says that these leaders don’t have a clue how to “fix” the economic calamity, and in fact, they can’t. He attacks the central bankers as the real movers and shakers in the cause of the mess saying they are meeting overseas, secretly, and we have no idea what they are doing since there is no transparency.
Ron Paul has released a new video discussing this weekend’s global economic summit with the G20 leaders. He expresses skepticism about the U.S. being able to maintain its economic independence against the push by Europe and China for a new reserve currency and more global centralized control.
George W. Bush is fighting against such centralized control, but how can we trust his words when they’ve been so far from reality in the last eight years? Ron Paul does not believe anything will be decided at this weekend’s summit, but believes it begins the discussion toward global economic planning.
Also of note is that Ron Paul will appear tomorrow around noon on the FOX News channel during a two hour special on the economic summit hosted by Neil Cavuto.
The title of this post was lifted directly from James W. Harris’ article at the The Advocates for Self-Government. I liked it so much, I had to use it, but with a reverent bow in Mr. Harris’ direction.
With Obama promising more bailout and stimulus packages, it’s pretty scary to take a look at how much money has been “doled out” recently:
Lets recap the amount of money spent thus far this year. A word to the wise, get some duck tape to wrap around your head, cause these numbers all together is gonna make it explode… if it hasn’t already:
$700 billion for Wall Street, including Bank of America (Merrill Lynch), Citigroup, JP Morgan (WaMu), Wells Fargo (Wachovia), Morgan Stanley, Goldman Sachs, and a lot more
Yes, over $2 trillion dollars. That $8 billion for IndyMac doesn’t even seem big anymore. Oh, and keep in mind that this doesn’t include the hundreds of billions the fed has and will buy up in commercial paper and lend out to other financial firms. The deficit is nearly $440 billion this year, and the national debt is $10.5 trillion. If these numbers don’t shake the next Congress into becoming more fiscally responsible, nothing probably will.
“I believe that banking institutions are more dangerous to our liberties than standing armies.” - Thomas Jefferson
by Jake, the Champion of the Constitution Originally published November 9, 2008 at http://www.nolanchart.com/article5438.html
In my last update “FDIC Gives Alpha Bank the Axe!“, I predicted a drought of closures with a possible drizzle (one or at most two minor banks) until November 4th, after that, regardless of the bailout, to expect a steady drizzle and possible downpour (few more major banks and a bunch of smaller ones to kick the bucket) before we close 2008. Looks like we are on the way! (logo)
With the addition of the three banks below, the FDIC’s Bank Body Count (BBC) for 2008 now stands at 19, most notably the recent closure of Houston’s Franklin Bank. [I admittedly cringed a little when I saw they used an image of Ben Franklin on their logo.] Another credit union has recently given up the ghost, making it 13 on the year.
Franklin Bank, Houston, Texas ($5.1 billion in assets, $3.7 billion in deposits, ~$1.5 billion cost to the FDIC) Date of Demise: 11/07/2008
Security Pacific Bank, Los Angeles, CA ($561 million in assets, $450 million in deposits, ~$210 million cost to the FDIC) Date of Demise: 11/07/2008
Freedom Bank, Bradenton, Florida ($287 million in assets, $254 million in deposits, ~$95 million cost to the FDIC) Date of Demise: 10/31/2008
High Desert Federal Credit Union, Apple Valley, California ($149 million in assets, cost to NCUA not stated) The credit union is now under the new dictionary term, “conservatorship.” Date of Government Takeover: 10/16/2008
Again, HAVE YOU PROTECTED YOURSELF?
First understand the FDIC, the NCUA, and the nature of the banking system. Here’s the fastest lesson I can manage. Try my other writings or just search the net for more information.
One of Liberty Maven’s (soon-to-be) Liberty Heroes, Thomas DiLorenzo, was interviewed by columnist Ilana Mercer. DiLorenzo, who recently wrote Hamilton’s Curse, discusses at length Hamilton’s strong desire for mercantilism in this country, and throws the stated desires of Obama and McCain into the mix for comparison purposes.
Obama is a slick politician, so I expect him to continue to administer the neo-mercantilist, Hamiltonian empire that has been built up by both parties over the decades, with all of its schemes for corporate welfare for defense contractors, investment bankers and myriad other politically active businesses which, in turn, provide financial support for the regime. But Obama is also a hardcore leftist who spent his earlier career working with some of the craziest socialists in America, groups like ACORN, who advocated such things as kicking doctors off the boards of hospitals and replacing them with “the poor,” and Soviet-style nationalization of the energy and health care industries.
Liberty Maven
far, in Liberty Maven’s ongoing series Liberty Heroes, we have profiled Walter E. Williams, Andrew Napolitano, and Barry Goldwater.
In my last update “
