My summary of Bush’s address tonight, which I just heard on the radio, is that the problems started about 10 years ago, when foreigners flooded the economy with investments. This spurred much positive economic activity, but it also created much moral hazard, causing individuals and firms to take out loans they never should have, and especially creating a housing bubble that threatens to ruin our banking system. So, while it goes against the president’s heartfelt belief in markets, there is no choice but to bailout troubled banks until the economy can rebound. It is not pleasant, but in the long run, we may even make a profit in the process.
Will this argument work? Despite its duplicitousness–markets didn’t create all that moral hazard on their own, foreigners didn’t create all that credit, and the Main Street that he wants to help will also be footing the bill–the answer is that it depends on whether Bush was successful enough in convincing the public that further and long-standing damage to the economy will result if Congress does not approve his plan. We can assume that no one putting these schemes together anticipated the overwhelming negative response from the public up to this time, thus necessitating tonight’s address. More than $700 billion in wealth transfers are in the balance.
Perhaps one shouldn’t be surprised with Bush’s argument–Hoover made a similar one to justify his White House Conferences in 1928 and 1929–but it does support the Austrian notion that inflation proposed today is always the supposed cure for problems caused by inflations past. If only someone would address why, this time, the current inflation won’t produce the same harmful effects at some point in the future.
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I watched the first few minutes as the network broke into Dancing With the Stars. I was impressed that Bush looked like he was trying desperately not to start laughing at tax payers and dollar valued asset holders he is trying screw. It must be the brain implant that the VP has but he just did not look in the slightest bit convinced himself much less able to convince anyone else.
I think the most amazing part of this is the way the Fed and Treasury are treating Congress. They are almost laughing at them. Although they did not laugh at Ron Paul as they know he is correct but their arugment is still: We are going to steal 5trillion, 700billion x 7 (normal increase factor of real cost over government estimated cost.) and there isn’t anything you can do about it because you won’t defund any war, base, program, and that they would never think to do away with the Fed.
The invasion of Iran became too politically unpopular. The invasion of Georgia was not even feasible since the bankrupcy was on the doorstep. These were the diversionary tactics to maintain status quo.
It (the economic hurricane) came upon them too fast and furious because they really are clueless. They really do not realize the overwhelming power and sweeping force of the market!
As a last resort they fell back on their unConstitutional practices of circumventing Congress and the people, thinking that their propaganda and their media control and the generational indoctrination would hold back any opposition to their vulgar scheme.
Enter Ron Paul and the revolution! He made it obviously ridiculous and politically impossible to ‘Bomb, bomb, bomb; Bomb bomb Iran!’
The CIA-trained Georgian troops directed by a puppet of the U.S. Empire to secure a oil pipeline and start a new Cold War did not escape those alert to the wicked deeds of the interventionists. And our hero Ron Paul spoke about it on a national platform.
Pop! The bubble burst and all the hot air of malinvestment and overconsumption whooshed out while the dumbfounded Keynesians conjured up their plan of theft and deceipt.
Again Ron Paul and his army of classical liberalism champions rebuffed the blatant mugging by the power elite. The voice of the people is rising and soon even the deaf, dumb (I am not talking about muteness), and blind Congress will feel its vibrations. Ultimately they will do what they are supposed to do or lose in the next election! The Campaign For Liberty is exercising its muscles and those muscles are significant.
Will the untrustworthy ones be able to convince anyone? Bullying will be their only option but let me remind the unConstitutional coup that the muscles of the Campaign For Liberty are significant!
Bill,
You spoke truer words than one wants to hear:
“…and there isn’t anything you can do about it because you won’t defund any war, base, program…”
Ach du lieber Himmel!
I think what happens in the next few weeks will decide if 2008 is lined up with 1929 and 1971 as historical dates when the long slide began.
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