See [update] below
By Mike DeVine, Legal Editor for The Minority Report and The HinzSight Report
As I get up off my knees from thanking Nature’s God for our first and latest Treasury Secretaries, I see the current state of economic affairs in dimes not spared, gardens not grown and three non-filing stations near my Carolina home.
I ran out of gas today when none of the three closest stations to my home were selling any. But I didn’t run out of food despite the fact I don’t grow it and no brother asked me if I could spare a dime.
1929 it ain’t, and, despite our problems, it won’t be, unless We the People commit historical mass suicide and turn the Indispensable Nation’s affairs over to Nancy, Harry and Barack’s 21st Century version of Herbert Hoover.
The United States has the worst economic system in history, except for all the others by far, thanks to the wisdom the Founders, and especially, current Treasury Secretary Henry Paulson’s most distant predecessor. Alexander Hamilton put meat (economic institutions) on the bones of private property based Liberty that produced an economic miracle that made Americans the most prosperous citizens in history since the early 1800s with enough dough left over to fund a defense against evil megalomaniacs for going on 200+ years.
Our prosperity suffered and as we endured panics in the post-agrarian industrial age culminating in the Great Depression, but, with government’s help following a Dust Bowl on the plains and a market crash that dusted up garden-property challenged denizens of big city tenements, Liberty was again unleashed to defeat fear itself, with Nazis and Japanese fascists thrown in for good measure.
Since then, the greatest threat to our prosperity has been oil embargoes of the foreign OPEC and domestic Democratic Party varieties. The latest wears the faces of The Speaker of the House Nancy Pelosi who would permanently lock away the bulk of our domestic reserves within 50 miles offshore so that fish can choke on it as it seeps towards Myrtle Beach and The Speaker from the TelePrompTer Barack Obama who welcomes high gasoline prices so long as we endure the rising of them like lobsters in a lukewarm pot.
Given that Obama and Pelosi have not learned the lesson of the Quaker State’s first oil well and our delivery from riding Donkeys, it should not surprise us that they of the party of the stubborn like a mule donkey, have also failed to learn the lessons of Hoovervilles, for they want to repeat his post-1929 crash trade tariffs and tax hikes.
The Hoovercrats blame the current financial crisis on a lack of regulation, despite the fact that it was Clinton Era regulations that directed Fannie Mae and Freddie Mac to guarantee mortgage loans to credit risky borrowers in the name of fighting supposed “institutional white racism.” So the loans flowed, egged on by an overabundance of non-salaried realtors and loan officers whose universe of potential customers were mostly credit challenged. The Hoovercrats now label the fruits of their regulations, “predatory lending” and were successful in enacting a major bailout of ARM mortgagees a few months ago.
For their part, McCain-Palin are out there blaming the Housing/Credit Crunch driven financial market crisis on “corruption on Wall Street.” This is too simplistic an explanation and too shallow a justification for “more regulation”.
While I would denounce Michael Douglas’s “greed is good” declaration in the movie Wall Street, greed is, and always has been since Eve bit the apple. And our system has been and is the best at channeling same for good and mitigating the bad as has ever existed.
The fact is that no amount of regulation can prevent speculative bubbles in a free society. And the alternative to a free society is the biggest bubble of all: tyranny and its attendant deprivation that makes one long for our relatively puny bubbles.
This is a basic lesson from that early Babylonian garden: without free choice, there can be no real prosperity. The Founders understood that for wealth to be created, people would have to risk failure, with the prize for success being to get to keep the fruits of one’s labor.
After man left gardens and started hiring them out to Winn Dixies, it became necessary for government to grow, so the argument of big vs. small government is moot. The issue is how big and whether governed by basic principles or moral hazard.
Clearly, Fannie and Freddie guaranteed too large a percentage of mortgage loans and their failure, combined with other factors including a weak dollar and high energy prices, has caused a crisis that we remain in the midst of. But I am confident that President Bush’s genius at Treasury, Henry Paulson, who lately has eschewed Sunday rest, based on Christ’s adage that the Sabbath was made for man, and not vice versa, to do the yeoman’s work of adjusting the Hamilton edifice for a changing world.
But one thing has not changed, as evidenced by the recent spectacular rise in the dollar: The United States is THE indispensable nation. The world can’t thrive without selling their wares here and investing their money here. The rise in the dollar started soon after Putin over-reached in Georgia. A dying mafia nation flush with lottery oil money counted on western euro weenies to counsel their eastern neighbors on surrender. But Bush put the US military on land and sea in Russia’s path to Tbilisi while the former slave states flew their Presidents to the Caucasus to give Putin the middle finger.
Russia’s stock market crashed. But they have Ossetia and the North Pole.
The world is voting with their money on America, while the Hoovercrats want to take money from Americans while denying them their own oil on the hope for a wind driven alchemy even Merlin the Magician couldn't conjure.
President Bush twice tried to get Congress to limit Fannie and Freddie. Pelosi refused.
John McCain tried to do the same. John McCain wants to drill offshore. Obama does not. McCain wants you and the businesses you work for and shop at to keep more of the fruits of their labor. Obama wants to raise taxes.
One day, the USA will fall. Greece and Rome fell. Eventually we will fall, and eventually I will die. But I’m not throwing my body in front of a semi to hasten the day.
For the world, we are too big to fail, but Obama, despite the role of non-accountability in the current crisis, wants to sell the idea that the government should ensure no one can fall. The last great such experiment ended with a wall falling near where his campaign began its descent in Berlin.
For Pelosi and Obama, the government is still too small to satisfy their gargantuan egos. But they are blind to America’s greatness, greatness too big to indulge their historical ignorance.
As discussed in the comments in my originally published version of this column at The Minority Report, Bush-Paulson-Bernanke are moving toward a more palatable permanent solution, albeit much more quickly than I imagined (necessitated by continuing world market jitters and to give banks to confidence to lend money again in the United States in order to avoid a deep recession or worse) following on the excellent panic prevention measures of three past Sundays and this week, as evidenced by the rallies in Asia and the DOW.
Yesterday, in an excellent discussion with DocJ and others, I said:
I agree that Fannie and Freddie, AS I SAID IN THE COLUMN, were too big and led to to the crisis, and that the eventual re-structure must be guided by our smaller govt principles and not THE bubble (socialism) that brought down the wall (Berlin - read Cuba if it helps) nor Hoover-like policies either.
The Paulson plan appears to be fashioned on the successful Resolution Trust Organization that acquired and re-sold the assets from the Savings & Loan crisis over a six-year period.
Finally, I said, and stand by:
The changing edifice [to which I referred in the body of my column above] [have been] the actions Paulson (and Bernanke) took weeks ago [and last night and pending] with respect to regulating the changed landscape of mortgage lenders and some of mergers.The actions you [DocJ] cite, [are those recent ones] that I referred to as the panic preventions. Stability is important in a crisis and Paulson's Sundays' moves [and this week] have been to try and get us past the crisis without a deep recession. So far so good.Yes, eventually, we need to reintroduce a MUCH larger possibility of risk so as to prevent reckless behavior.But we will always have bubbles and we will always need govt as an umpire and to prevent crises that would cause great suffering across the economy from growing into deep recessions and Great Depressions.[As Streetwise said:
Human nature is very dependable.
One of the main reasons we don't have them or haven't since the 30s is the learned lessons from Hoover and FDR re taxes and money supply and some of the shock absorbers built in which Reagan called the safety net for the truly needy.
I think it is good that the Democrat Congress is having to deal with this situation in the midst of this crisis with a Republican Administration now, rather than having time to hold witch hunt hearings while trying to build a Socialist State with a Maverick over periods of time of MSM ally propaganda.
Stay tuned for more updates.
Mike DeVine’s Charlotte Observer columnsLegal Editor for The Minority and HinzSight Reports"The way to stop discrimination on the basis of race is to stop discriminating on the basis of race." - The Chief JusticeRace 4 2008"One man with courage makes a majority." - Andrew Jackson