Posted on 11/10/2008 4:34:17 AM PST by NewJerseyJoe
Ayn Rand recognized a common pattern in the growth of political power: The enemies of liberty blame the free market for economic problems caused by government interference, then use those problems as a pretext for yet more political controls. Much of Rand’s prescient novel “Atlas Shrugged” revolves around that cycle.
Now Rand’s critics sound exactly like the villains of Atlas. They wouldn’t attack her if they didn’t recognize her as a barrier to their grand central plans.
Recently Alan Greenspan fueled the Rand hunt. In an Oct. 23 statement to a Congressional committee, Greenspan said he had “found a flaw” in his ideology of “free, competitive markets.”
There’s just one problem with Greenspan’s statement: He practiced no such ideology. For two decades, Greenspan served as chairman of the Federal Reserve, a central planning agency tasked with manipulating the money supply. Greenspan’s flaw is that he long ago abandoned the ideology of liberty.
Two decades before becoming a central planner, Greenspan, while still in association with Rand, warned of the dangers of the Federal Reserve. In a 1966 article, Greenspan noted that, in the late 20s, the “Federal Reserves pumped excessive reserves into American banks.” This “spilled over into the stock market — triggering a fantastic speculative boom.” Sound familiar? Greenspan became the monster he once warned against.
Today’s crisis centers around risky home loans. But were these loans made on a free market? No. Instead, they were encouraged, and in some cases mandated, by the federal government.
Not everyone has forgotten Rand’s wise criticisms of central planning. Before the election, we asked Yaron Brook of the Ayn Rand Institute to summarize the causes of today’s crisis.
Brook answered, “The most harmful instances of government interference in the economy include, but are not limited to: the Federal Reserve Board’s inflationary policy of keeping interest rates artificially low and the money supply artificially high, the government’s hand in the creation and management of Fannie Mae and Freddie Mac, other government ‘affordable housing’ policies including the Community Reinvestment Act, and the policy of bailing out large financial institutions deemed ‘too big to fail.’”
Brook further explained the damage of government inflation: “As Ludwig Von Mises and other members of the Austrian school of economics stressed, inflation does not simply raise everyone’s prices. It leads to massive, unfair redistributions of wealth. It starts with the injection of money into one sector of the economy, where participants are rewarded with higher prices for their products — most recently, we saw an enormous redistribution of wealth to those involved in home-buying — and then gradually spreads to drive up all prices higher than they would be absent the inflationary spending.”
The cycle Rand warned about is in full force. Brook noted, “Unfortunately, despite a few enlightened and courageous voices out there, most politicians and commentators are blaming greed and the market for the current crisis and demanding more government control of markets as the solution — and most of the public believes them. The media share the general cultural antipathy toward genuine capitalism, so they are inclined to publicize views that blame the market for today’s problems.”
Both major candidates for president followed that stock line. While John McCain also blamed unspecified “corruption in Washington,” he emphasized the “greed and mismanagement of Wall Street.”
Barack Obama blamed greed and deregulation, despite the fact that nobody can point to the repeal of a regulation that could have caused the crisis. By contrast, the mechanisms by which government controls caused the crisis are clear.
Obama’s rhetoric ignores the nature of the free market, in which the government consistently protects the individual rights of each participant.
Can people be “greedy” on a free market? If that means they can pursue their own prosperity and happiness while respecting the rights of others, sure. If greed means people can use political force to get their way, then we’re no longer talking about the free market — we’re talking about the sort of system that McCain and Obama advocate.
Does the government “regulate” the market by protecting property rights, resolving contractual disputes, arresting those who threaten and practice brute force, and rooting out fraud? In a sense, yes. But by imposing political controls that infringe people’s rights, the government makes the market irregular and disrupts the rational plans of individual participants.
Unfortunately, Obama has sworn to impose even more economic controls. He wants more corporate welfare and more central planning for energy. He wants to further socialize medicine, even though costs are so high because of existing political controls of the health market. He wants increased federal spending, resulting in higher taxes or more deficit spending.
Obama’s central plans are bound to create more economic problems, which he will no doubt blame on whatever liberty we have left. At least Rand through her works will continue to set the record straight.
Linn is a local political activist and firearms instructor with the Grand Valley Training Club. His son Ari edits FreeColorado.com from the Denver area.
it’s my understanding that it has been shelved again-that’s probably a good thing. In my opinion Angelina Joiele and Brad Pitt are not capable of doing justice to the book.
Since the 11/04/08 travesty I've been wondering which direction true conservatives should take:
1) toil on under the yoke of socialism and hope that America realizes the folly of electing Obama and reverses course,
2) go gulching,
3) red state secession, or
4) revolution.
My personal opinion is that the red states should seek a peaceful political separation from the blue states.
That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
We saw Republicans making an attempt to stop it, calling for more oversight of these activities only to be met with charges of racism - lynch mob mentality...to which they appear to have folded...bringing us to where we are today.
Either they are spineless or they are clueless.
That's basically it in a nutshell. Now what are we doing to fix this problem? Pretty much the same policies that caused the problem except a greater scale: monetary inflation, negative interest rates, financial sector bailouts (black hole), and ultimately attempts to manipulate longer term rates downwards.
Maybe her dad can help her out. That's what they're for, y'know.
The more detached people become from cause and effect and consequences, the more attractive liberalism becomes and more liberalism thus seems like the answer to all problems. The reality is that consequences, the feedback loop of our self correcting system, can only be denied until the money runs out. Since money is spent in direct proportion to the amount of liberalism in the system, we are fast headed for some schooling.
Initially, liberalism feels like summer vacation, but now vacation is over. The election results and these billion dollar bailouts are like paying for tuition and a semester of classes at the school of hard knocks and now classes are about to start.
Then we will get the wall we wanted but not to keep illegals out, instead to keep the producers in. No sane person will want to come here, legally or otherwise.
That is what happened in East Germany and Cuba. All totalitarian governements eventually must keep their people captive.
If you're looking for an argument from me, you won't get one. I've thought the same thing for a very long time. The Democrats have achieved MORE than just putting a black marxist in the WH, they have successfully implemented the communist doctrine of "divide and conquer".
The US has been politically divided by the left in a way that I have never seen before. We are so politically polarized that we cannot conduct a war anymore with 100% support, despite the fact the WE were attacked!!
Frankly, I won't be surprised if we have another civil war in our future between liberals and conservatives. The foundations have been laid by the left and I'm just waiting to see what the trigger will be.
Please elaborate.
How about regulation of credit default swaps? My admittedly limited understanding is that a lot of people that sold them took on obligations that they were not sufficiently capitalized to meet.
It seems like regulation to prevent that would be needed, and could be placed under the libertarian umbrella of forbidding fraud.
As I said, my understanding of CDS is limited. If there is some piece of the puzzle I am missing, I would appreciate any enlightenment.
http://www.youtube.com/watch?v=Zc7oZ9yWqO4
From The Fountainhead by Ayn Rand, Gary Cooper as Howard Roark delivers the memorable courtroom speech in self-defense for dynamiting Courtland.
Or, perhaps, France . . . . . ?????
LOL!!!!
What did happen?
Look it if all the information has been posted here many times.
Look it up all the information has been posted here many times
Clear as mud.
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