No More Regulation!

There has been a lot of bogus explanations for what caused the Panic of ’08 and its ensuing recession, but the most absurd comes from a well-respected financial website, DailyFinance.com, written by Peter Cohan. He blames our current economic mess on, of all things, small government:

The idea [of small government] has influenced American politics for almost 30 years, and helped create the ineffective regulatory agencies which allowed all kinds of questionable practices to thrive in American business, especially in the world of finance. By helping create a record debt bubble, which thrived in an era of weak regulatory oversight, small government nearly ruined the global economy last fall.

There is so much to critique in this nonsense, it’s hard to know where to begin. I don’t know which America he’s been living in, but this country hasn’t seen anything but gigantic and bloated government since since at least the middle of the 20th century. Ronald Reagan and George W. Bush may have paid lip service to small government, but their Administrations vastly expanded the size and the scope of the State.

Cohan also recites that oh so popular catchphrase of “deregulation” to explain our stagnating markets. If only government regulations had been stricter, the evil bankers and businessmen would have never preyed on an innocent American public. This faith in government regulation is extremely naive, since we have had (and continue to have) miles of pages of regulations enforced by thousands of government agents. The list of regulations is exhaustive, and it’s hard to imagine any aspect of our economy that our government didn’t or doesn’t regulate.  Regulators have been nothing more than co-conspirating robots, extorting the public in the name of their interest.

Government is the only institution that when it doesn’t work, it asks for money or control (public schools, police departments, the Post Office, etc.)

Despite extensive oversight and an endless source of funds, regulators, with droning consistency, always fail in their intended goals. When they fail, there is always a demand to come up with new regulations and hire more empty suits to enforce them; a cyclical motion of corruption, residual failure, and waste.

The perfect example of this is the Federal Reserve. The Fed, a central bank operating in complete secrecy, distorts and manipulates the economy with its inflation and easy credit. The resulting effect is an endless cycle of booms and busts. When the economy does bust, like it did last September, the Fed and all of its statist partners blame “capitalism,” “free markets,” and “deregulation,” and then proceed to inflict a sickened economy with the cancers of more inflation and easy credit.

What it boils down to is that the government plays too big, not too small, of a role in the economy, and the financial sector especially. In a truly free-market capitalist economy without the government there to socialize their risks while privatizing their profits, bankers would act a great deal more prudently. They would have to; the disciplines of a free and competitive market combined with a sound currency encourages this. Currently, with our semi-fascist mix of government and private industry, we see banks creating secondary markets for IOU-backed mortgages to people who could never afford them , since the government is there to pick up the tab for these risky investments. No amount of regulations can control the reckless chaos of a Fed fiat-money economy.

For almost 100 years, the American economy has been guided by the destructive, immoral, and evil hands of the statist central planners in DC. Isn’t is time we give small and limited government a try?

What recession?

It turns out that not everyone in America is feeling the sting of the recession in the same way. DC is apparently booming:

A DC tourism association reports this week that overall visitors to the nation’s capital were up 3% from 2007 to 16.2 million, and international visitors were up a dramatic 22% to 1.4 million in 2008. The Washington metro area’s unemployment of 6.2 percent also trails the national average, which is nearly in double digits.

The Obama Administration is also proposing to spend $400 million to fix up the grounds of the DC National Mall, a tourist hot spot, loaded with museums, monuments, and other “freebies” that keep the tourists coming.

Obama’s presidency is defined by the expansion of federal power and control, and it’s no wonder that the Egomaniac-in-Chief is also using the DC National Mall expansion to sell political memorabilia of himself and offer Obama-themed tours.

The Imperial City is immune to the recession woes felt by most Americans since it is an overgrown bureaucratic parasite, living and growing on wealth stolen from the American people. While the rest of the country is witnessing double-digit unemployment and the increase in the prices of goods due to the inflationary monetary policy of the Fed, DC picks the country’s bones cleans and throws us the scraps.

This sad state of affairs goes all the way back to ancient Rome, where the

productive, private citizens in outlying regions of our nation and states are financially burdened to pay for a parasite public economy of lawmakers, lobbyists, contractors, and bureaucrats in the political centers.

The DC leeches are living it up at our expense, and Americans are starting to get sick of it.

Sacramento is California’s budget problem

Last May, California voters turned down every tax-hike that Sacramento threw their way by overwhelming margins in its attempt to fix the state’s $26 billion-dollar deficit. The Governor, Democratic legislatures, the California Teachers Association, and nearly all of the state newspapers labeled the May 19 propositions as the only way to solve the Golden State’s budget woes. Using the trusty weapon of fear, panic, and threats of “devastating cutbacks,” California’s political establishment tried to scare its subjects into submission, and when they refused, lashed out. The Los Angeles Times and The Sacramento Bee,  both pointed their pens at the supposed culprits behind the budget mess: California voters.

The arrogance and incompetence of California’s political elite is never surprising, and the fact they targeted voters for this state’s budget binging (and continue to do so) reveals that Sacramento is not only fiscally bankrupt, but is also bankrupt of ideas. After their tax-and-waste scam failed, Sacramento’s best and brightest started issuing worthless IOUs, refuse to make any serious cuts, and plan to beef up the state’s tax collecting power. Every new proposal or bill that crawls its way across the floors of the State Legislature aims to cripple private enterprise, tax our “bad habits,” and fails to place the blame where it belongs: on our legislatures and the union gangs.

Two decades ago, California was a business-friendly state that maintained a balanced budget. It has now turned into a state virtually run by public-sector parasites, and three in five of those public sector workers belong to unions, compared to the two in five average of other states.

The Democratic Party, which years ago sold its soul to the unions, has controlled the legislature and most statewide positions, translating into more government workers, higher salaries, and increased pension costs.  Last year, California spent almost $7.3 billion dollars paying its pension fund, and more than 5,000 former public employees are taking $100,000 a year from taxpayers.

For the last two decades, Sacramento’s policy has been to loot and pillage the free and productive private sector in order to fund an increasingly wasteful and bloated public sector. As businesses raise prices, cut costs, close up shop, or leave the state altogether, it’s easy to see why the trough of entitlements is losing funding.

The stranglehold that the Democrats have had on Californians has created a top-heavy, bureaucratic monster in Sacramento that can only be tamed with more and more taxpayer money. Government has the unfortunate trait of never being able to go out of business, and when it fails, as it tends to do, it simply asks for more funding. Governments have no incentive to please their customers, manage costs, to be efficient, or to adapt to ever changing demands. The market, on the other hand, is government’s polar opposite, and it continues to be squeezed by Sacramento.

While the legislatures pick apart businesses to the bone, they throw us the scraps, and ordinary citizens are forced to save, tighten our belts, and are expected to bear even more of a tax burden. Fortunately, Californians are starting to see through the Sacramento statists’ bluff, and as an election leers just around the corner, it couldn’t have come at a better time.