By Monty Pelerin, on December 13th, 2009 Frederic Bastiat has been referenced before on this site. His understanding of political economy was unsurpassed. Here is an excerpt from his essay “Property and Plunder” that is almost a perfect description of the conditions in the US. I suppose any of us could have written such a description, but Bastiat wrote this in July 1848. Emphasis below, mine.
“Next comes taxation. It has become a much sought-after means of livelihood. We know that the number of government jobs has been increasing steadily, and that the number of applicants is increasing still more rapidly than the number of jobs. Now, does any one of these applicants ever ask himself whether he will render to the public services equivalent to those which he expects to receive? Is this scourge about to come to an end? How can we believe it, when we see that public opinion itself wants to have everything done by that fictitious being, the state, which signifies a collection of salaried bureaucrats? After having judged all men without exception as capable of governing the country, we declare them incapable of governing themselves. Very soon there will be two or three of these bureaucrats around every Frenchman, one to prevent him from working too much, another to give him an education, a third to furnish him credit, a fourth to interfere with his business transactions, etc., etc. Where will we be led by the illusion that impels us to believe that the state is a person who has
Continue reading Our Government? No, All Governments
By Monty Pelerin, on December 4th, 2009 Milton Friedman was one of the strongest defenders of liberty and free-market capitalism. His insights, retrospectively, seem more important in light of what has happened and our current situation. This interview is was done in 1975, almost 35 years ago. Viewed today, it is especially relevant for its prescience and cautions. It presents an excellent case for limited government.
http://video.google.com/videoplay?docid=6813529239937418232
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By Monty Pelerin, on November 30th, 2009 This post is older, but classical in its approach to the housing crisis. It sheds light on how the crisis started and grew, and why government intervention will hurt rather than help. It is a good, elementary exercise in understanding economics.
Government Intervention Is Needed to Solve the Housing Crisis? It Just Ain’t So!
By Steven Horwitz • May 2008
In his March 18, 2008, column in the New York Times, David Brooks addresses the ongoing problems in the housing industry and concludes that “In normal times, the free market works well. But in a crisis like this one, few are willing to sit back and let the market find its own equilibrium.”
Instead, Brooks calls for a variety of government interventions to address the problems he sees, even as he recognizes that government contributed to those problems. Consistently throughout the column he fails to be as skeptical about regulators as he is about market participants, although the regulators are the cause of the problem and the key to his proposed solution. It simply “just ain’t so” that additional regulations are necessary to deal with these problems; in fact, they are likely to exacerbate them.
Brooks begins with a typical litany of potential problems arising from the fall in housing prices. Millions of people are expected to default on mortgages in the next few years, with
Continue reading How Not to Fix Housing Crisis
By Monty Pelerin, on November 28th, 2009 If the Government confiscated everything, the social programs would still be $50 trillion short and the Government would still be bankrupt. Furthermore, no company or individual would be left with anything.
The economy is in bad shape. Some say it is worse than any time since the Great Depression. I believe it is actually worse than the Great Depression because of the level of debt. At the time of the Depression, neither governments nor individuals were deeply in debt. We were a nation of savers. Now we are a nation of spenders, living beyond our means. Individuals and governments at all levels are over their heads in debt, some literally drowning.
The debt problem is intractable. This conclusion is not economic but mathematical. It literally is mathematically impossible to get out from under the level of existing debt. To demonstrate, only the Federal Government will be dealt with. Such a focus greatly understates the actual problem, because it ignores personal debt and lower-level government debt. States and municipalities have grown well beyond sustainable levels and are running large deficits. Some defaults have already occurred. Individual bankruptcy filings are soaring as are foreclosures.
Promises Beyond Reality: The Federal Government admits to over $12 Trillion dollars in debt. In reality, its obligations are multiples of that figure. The unfunded promises from Social Security and Medicare total around $100 trillion. That is, to properly fund the forecasted future deficits in Social Security
Continue reading Spiraling to Bankruptcy
By Monty Pelerin, on November 21st, 2009 Here is a link to the film I.O.U.S.A. If you want a quick understanding to why the country is insolvent, this is a good view. A similar source is Chris Martenson’s Crash Course. Both of these videos should be required viewing for every man, woman and child in this country. If viewed, few incumbents would win re-election.
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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