At the end of 2008, when the Housing bubble burst, it was fashionable on the Left to blame that specific market’s failure on the Free Market in general. Those supporting a centrally planned Economy or a Socialist Economy or an other-than-Capitalistic Economy gleefully highlighted the damage done as evidence a Free Market could not protect the populace from economic loss. Without addressing the fallacy that it is a Free Market’s responsibility to shield people from the consequences of economic risk, one must ask if there is truth to the claims of anti-Capitalists.
I would argue there is not for two reasons.
First, the argument is false on its face. Free Markets built this country. Look at the incredible achievements illustrated by huge metropolitan areas like New York and Chicago. These cities did not spring from the ground at the command of central planners. They were conceived, designed and built by men who owned their lives and were free to risk their wealth to accomplish their dreams. If that sounds vaguely familiar it comes from the phrase “Life, Liberty and the Pursuit of Happiness”. Enough of these men gathered in fertile areas that cities sprang up; at first because of individual efforts and later due to collaborative efforts. But no Government decree produced such splendor. It is worth noting that it has taken little time at all, comparatively speaking, for the central planners who came to parasitically feed on the success of their betters to turn thriving examples of a productive Free Market into equally impressive examples of consumptive Socialism.
Which Government program was responsible for the accomplishments of Henry Ford or Bill Gates? These men, in the space of a single human lifetime, dreamed up and implemented the manufacture of products which literally transformed the planet we all share. Even the Internet, originally developed to help educational institutions and Government agencies to communicate, would not be the business-culture-society altering product it is without the early and continued involvement of private individuals risking, and often losing, vast sums of money in a quest for success based in Free Markets.
Secondly, there is the myth Free Markets influenced the Housing Market to a sufficient degree to be responsible for the creation and collapse of the bubble. The Internet is, perhaps, the only remaining Free Market based industry. In virtually any other industry of importance the Free Market has long since ceased to operate. How did this happen? It is not possible for the 535 members of Congress to have the knowledge and wisdom needed to run such a vast and complex enterprise as the US Economy. When Congress looks into a given industry, they turn to the experts, the companies which make up the industry itself.
These companies have been and are asked to advise and consult on the state of their industry and the solution to its problems. This is the heart of the problem. Markets are Free only insofar as the men, in Government and in Industry, are committed to Free Markets. But Government sells access to the process and Corporations are eager to pay to play and acquire the ability to influence the legislation and regulation of their industry. Once seated at the table, they used their access to to discourage competition and profit from Markets that are no longer Free. We can see this process at work in the Insurance and Pharmaceutical industries currently demonized in the media and by the Left. This not the Free Market at work. Government corporations like Fannie and Freddie are not Free Market entities. The behavior of most of the domestic auto companies in the recent bail-outs are hardly examples of the Free Market at work.
So I ask you, what major US industry operates within the brutally punitive and fantastically rewarding environment known as a Free Market? Only the Internet. But with central planning concepts like Net Neutrality, Internet Taxation and the recently proposed power for Govenment to shut down the Internet at will, even that seems doomed to fail in short order. Given all this, the notion Free Markets failed the Economy is shown to be false and to have been so for years. On the contrary, it is the Government and consumers who have failed the Free Market. We have allowed this to happen. If we want to reverse Econmomic downturns, Recessions and the volatile nature of our current Economy, America must reject the politically correct blaming of Free Markets fashionable among the Left’s ruling elite in Washington and return to the heyday of the American Economy where all parties competed in a Free and Fair Market. Such a return would increase productivity, decrease costs, expand the Economy and, as it always has, lift the US and the world’s income and standard of living. The only thing standing in the way is sufficient indvidual commitment to the truths of history as they relate to Free Markets.
Ken Marrero
Ken has blogged personally at Blue Collar Muse since 2006, founded the Tennessee ConserVOLiance in 2007 and serves as ALA's Director of Grassroots Outreach and Coalitions.
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Hi Ken –
This is great and we all need to bring back activism in our government and our nation. Stand up and be counted! Sometimes our silence is not golden, but it may be yellow!
With all Americans getting involved and stating to our Washington group what we like and what we don’t like, is the only way to bring about good government. Those liberals who do not want to listen and who are so “politically correct” need to take a hike!
Betty Hanson
brandehanson@sbcglobal.net
Well said Ken.
I believe in less government and more free market ideas to rid America of its cancer causing “What can Government Do for Me” attitude.
When a freedom is given to the government, you’ll never get it back unless there is a revolution. We were given a Constitution with limited government.
We must take it back or we will live under tyranny until we do.
With the Tea Parties and other organizations of the PEOPLE, there will be an uprising like none other since the Revolution. We are a country built on Godly principles.
Excellent point, which illustrates how the very style government that the anti-capitalists are trying to create is in fact the style of government already causing the problems.
If they truly wish to address the style of government causing the problems they need to look no further than themselves, and cease pushing their own agendas.
Ken, great post! I think that the heart of the problem is a Federal Govt so big that its influence on the market is so great that it creates an incentive to big players in industry to buy influence that the Govt is peddling. Shrink Govt and lessen Govt’s influence on the Market and reduce or eliminate the incentive of pay to play. The Fed Govt is so unleashed now from its constitutional confines that it is now questionable whether or not it can be returned its limited enumerated powers. That won’t stop us from trying though!
This is well said and oh so true. The problem is we don’t have many couragous people anymore and to do this you will need to have some courage. You will need to be able to stand and walk against the current grain. Who can do it. Most people today are afraid to say how they really feel or what they really want. As you said Ken, it just is not fashionable. Can it, once again, become fashionable to have courage? Can it become fashionable to tell the truth even if its not politically correct? I don’t know, but I do know that this is what people will have to determine. To undo everything that’s been done we will have to go to work in the inner cities and show them that this is the best way to achieve, who is willing to do that? I don’t know. Interesting.
What do we expect when the last two generations have been taught by liberal or Marxist professors? We need to take back our schools and the media. Aren’t there a few conservative zillionaires who could gain financial control over some of these liberal/Marxist news rags. I live in a medium size town and the only paper we have is the usual ultra-left rag even though my area is generally conservative.
Talk about government interference, try to get through to the IRS that one can not live on what they expect you to pay. One mistake in a lifetime will wipe out all the years of paying our dues to live in this great nation. I have been on SS disability for 15 years after getting hurt on the job in 91 and they want $1000.00 a month until 2017. Is this fair, where is the compassion for a veteran of this country during Vietnam , This is an anti bailout if I have ever experienced one.
Jonah Goldberg, in his book “Liberal Fascism” labels government intervention and business acceptance and cooperation, statism, corporatism or fascism. They are all the same things, as he says. To reverse this, it will take the collective will of voters practicing active citizenship. Otherwise it is just a matter of time before what little we have left of a free market economy will disappear.
First, I’m a tax accountant and a financial advisor. I say this because I’d like to think I have a better grip on what has happened and why. NOTE I said “I’d like to think” – what’s happened in the last couple of years has forced me to rethink and relearn what I thought I knew.
Until recently, I had never heard:
A – there was depression PRIOR to the crash of 1929 but we never learned that in school. From the third quarter of 1873 through the first quarter of 1879 – about 5.5 years.
B – Hoover made the depression into the GREAT Depression by having the Feds meddle in the Free Market and by absorbing tons of offshore political debt related to the WWI;
C – Hoover’s policies led to an interesting situation in the economy during the Great Depression – the US had 25% unemploment at the same time wages actually increased for the working!
I highly recommend the book “The Politically Incorrect Guide to The Great Depression and The New Deal.” It is a real eye-opener and explains a LOT of what happened and why; and how those same policies, which didn’t work then, are being applied now and why they won’t work now either.
Excellent post, Ken. Keep up the good fight.
Excellent post!
The wisdom of the Free Market is in the millions of indvidual choices being made that integrtate into the Invisible Hand of Adam Smith.
The leftists have been dragging us away from Free Markets steadily over at least a century. Now that they have completwly mucked it up, they are blaming…WHAT ELSE..???— FREE MARKETS!
You can see the cynical duplicity of Saul Alinsky at work. He taught them well how to take power. Recent events seem to indicate that he providied no training on how to use it.
John
It’s terrible to think these methods could be applied knowing it will destroy our economy in order to further the leftist agenda, which is more Americans dependent upon the government? As creepy as that sounds, I wonder if it could be true. Look at the comments these Czars have made over the years, before they were hired by the president. I have to say I’m scared to death of the agendas these people have.
I recieved this qoute this morning from the Patriot post:
“Cherish, therefore, the spirit of our people, and keep alive their attention. Do not be too severe upon their errors, but reclaim them by enlightening them. If once they become inattentive to the public affairs, you and I, and Congress, and Assemblies, Judges, and Governors, shall all become wolves.” –Thomas Jefferson, letter to Edward Carrington, 1787
Great article. I have been arguing the same thing since the first talks of an economic stimulus package. This is not the failure of the market, but a failure of a fractional system that is only partially free (much like our monetary system before we went to fiat money). The same argument now applies in the midst of the health care debate. I was discussing this with a neighbor recently, and when I proposed the idea that a free market would fix the health care industry, he said “well that’s what we have now.” Of course that is false. In fact, as everyone here probably knows, it is government intervention that is the cause of much of the high costs that plague (no pun intended) our health care system. They impose regulations on hospitals (such as denying them the right to turn someone away) but do not offer to pay for the cost of these regulations, forcing the cost to shift onto the productive part of society – which in turn raises costs for everyone.
We must continue to defend free markets and address the delusion that they have put is in the situation we are now in. Voluntary exchanges between free individuals are one of the most important elements of a liberty-centered people.
Ken, you are STILL my hero!
An excellent post! The “Pay to Play” policies and power brokers have severely hurt our economy over many years. It is high time we the people take that power back.
What about the argument that it is bankers that are controlling the markets along with our own inability of individuals to live within our means. We have accepted the banks credit slowly and surely until they have become our master.
Owners of capital will stimulate working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable.
The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and State will have to take the road which will eventually lead to communism…Karl Marx
Ken,
Well put! Here’s my two cents:
The US Legislative and Executive branches have been hard at work delivering “programs” that they believe will create the Utopian society that fits their vision. They all continue to labor producing legislation and grandiose schemes which they believe will make us all happy and equal – “provide for the general welfare.”
In the not too distant past we saw the beginning of the current economic crises when elites and academics alike saw our society and determined that we had progressed to a point where every American had the right to own their own home. So they talked and talked until they figured out the appropriate legislation to set up a “program’ to achieve such ends. They hid the far-ranging costs and their ambitions behind flowery words and initial small implementation. As time went on, those very elites and academics began working outside of the governmental process, using Foundation grants and liberal donor contributions to form alliances and create community organizations. The new expanded partners for “change” allied with the new media elites to form a coalition pressuring the Congress to expand the existing programs, provide new legislation and funding, and pressure independent agencies and the Executive branches to expand that new “right” even further. That coalition, behind the powers exerted by Congress directly and through the bureaucracy, forced banks to expand home ownership to less and less qualified buyers. All this took place under the regime of Democrats and Republicans alike with the enabling interest rates from a complicit Federal Reserve.
Over two years ago, when it became clear to every citizen, that we were all in danger – reminds one of the tale of the frog put into the pot where the heat slowly rises until he’s fully cooked, Congress decided that there were not enough regulations in place on private enterprise. All the while, that same Congress ignores any regulation of the quasi-governmental corrupt entities which were the agents of Congress and their coalition partners. Then. a little over a year ago, Congress and the Executive joined with a Progressive Treasury Secretary to begin the process of central planning of the US economy. Corporate executives since then have joined the parade for the simple and corrupt reason that they have to join in to remain competitive. We new have seen most of our industries – Banks, Industrials, Manufacturers, Transportation, IT, Services, Real Estate, etc – spending hand over fist to lobby for the minimal regulation in order to remain competitive. The coalition now has grown to include nearly all facets of US life – except the lonely middle-class taxpayer. That very same middle-class taxpayer is the one who will be stuck with the costs. Those “programs” and high-minded laws with the complicity of business (formerly free enterprise) will now pass on the costs to that same middle-class taxpayer.
Last year we were quiet, having been alarmed enough in the preceeding year, when our Progerssive Treasury Secretary (Henry Paulson) acted to scare Congress and the President into the first Stimulus, prop up the Banks, finance corporations “too big to fail.” The Federal Reserve remained complicit by printing money. All those actions under a failed economic theory proposed by Keynes. This year, new Congress, new President, same old coalition of elite media, academics, Foundations, community organizations, and unions continue to plod along with that failed theory, moving the US foward towards another failed enterprise – National Socialism.
We had the second Stimulus rushed through early this year because it was imperative that the government act immediately-little of that has been actually spent over six months later. The primary effect has been dual – increase in the National Debt and increased regulation that will surprise the population as it expands government through its implementation and enforcement. A ’supplemental’ 2009 budget resolution was passed – again more debt and increase in federal government power over the populace. Next there was the 2010 Budget – more of the same. It is truly astonishing how much those three things did to the National Debt in such a brief period.
Now, despite public outrage by the middle-class taxpayer, we have both Cap-and-Trade and Obamacare before Congress and hanging over that very same middle-class taxpayer and his great-grandchildren.
In March, those taxpayers started to move and by April 15th we saw the first Tea Parties in cities nationwide where the taxpayer assembled to converse and to be heard. As our beknighted Federal Government taxed, increased the debt, took away Constitutional guaranteed liberties the movement enlarged. Congress and the Executive heard much more frequently from voters objecting, while the media mostly ignored the new activism. The coalition of elites (the Legislative and Executive Branches, academics, media, community organizers, foundations, unions, and now ‘Big Business’) are now starting to hear the grumblings; and, they don’t like it!
The academics are finding that alumni resent their Progressive positions, and are not donating. The media ignored the “letters to the editor,” disrespected the gatherings in Tea Parties; but, now feel free to paint the well-behaved demonstrators as a brown-shirted mob. The elected officials chose not to listen to the voter, instead listening to their coalition partners; and, are now faced with angry constituents if or when the official is courageous enough to go outside their DC office. I expect at some point the consumer who gets screwed by the “pass through” taxes will object to the Big Business partnership with Big Government and more selectively chose the spending of what little remains of their hard-earned income. Lastly the community organizer and union thugs who interfere and attack the taxpayer/voter/ctizen will soon find themselves either joining in the effort to take back the government or locked up. Where is the ACLU now?
Our partners (think-tanks, the NRA, civil rights organizations) have provided the expertise to examine the content of Cap-and-Trade and Obamacare. They provide us with the detailed material to educate ourselves and each new arrival to the cause. That detailed education and its promulgation is now the subject of unprecedented attack by the coalition – even the President himself lies in public and requests that opponents commentary is reported to The White House! Congress (elected representatives all) are now supposed to be back to their districts to hear from their constituents; but, almost all now are demonstrating their cowardice by hiding or meeting secretly with carefully selected supporters. Those same cowardly Congressmen call on union thugs to attack constituents who want answere – or, call the police when questioned by the ignored taxpayers.
And yet it continues ….. Congress looks for more ways to hide the effects of their bloated legislation. And, incredibly we have this …. Senators Jay Rockefeller (D-West Virginia) and Frank Lautenberg (D-New Jersey) have introduced legislation that would require annual per capita reductions in driving each year. Another bill, the National Transportation Objectives Act, introduced by Representative Rush Holt (D-Indiana), Representative Russ Carnahan (D-Missouri) and Representative Jay Inslee (D-Washington.) would require a 16 percent reduction in driving in 20 years. The Urban Land Institute, Transportation for America, Progressive Railroading (foundations, think tanks, or community organizations funded how?) has joined others to reduce our vehicle miles – wait for the SNAFU associated with the money in the Stimulus for ‘high speed rail.’
At what point will we hit critical mass? Will our Congress and President stop, listen, and act to restore the Constitution? Will “Big Business” stop colluding with big government in fear of competition or unequal regulation? Or, will we have to keep up the “shock and awe” until we successfully remove the arrogant bastards and replace them with those who will restore Constitutional Liberties?
Demacrats pushed fane mae and fredy mac to loan people money they could not pay back due to there low income.thus we get the housing bubble.
Thanks for a great post. Individually,we must be willing to take a stand, join with others of like mind and work to change the system we now have. We can see that ‘we’ have the ability to make a difference, but only if we stand up. Unfortunately, too often, it is easier, less frightening to say and do nothing.
Amen to that! We have attempted to correct our governments problems through a two party system for far too long & seems to be moving backward. I cannot understand why people cannot get that both Dems & Repubs. are seriously flawed & are too strongy controlled by special interest groups. WE NEED A STRONG INDEPENDENT! Or someone like Ron Paul.
I agree with what Ken has written, with one exception, I work in the flooring
industry in a brick and mortar operation. Its not fair that internet
sites who have little or no overhead sell the same material as I do with
the added benefit of not having to charge 9.25% sales tax. Keeping tax
off the internet has unintended consequences just like much of our Governments
action does. Over 400 flooring stores in northern california have gone out
of business. This is due to the internet and to consumers paying “illegal
aliens” cash to do the work. Because I operate according to the law, I pay
good wages and have additional cost of workmans comp and liability insurance.
The reason stores are failing is not just the two reasons i’v sited but it is contributory. Other than this one thing ken is right on and I also enjoyed the numerous posts from fellow patriots. There are a lot of thoughtful and
intellegent members out there
The idea that the housing market was “free” is as ludicrous as any the Left has ever put forth. Banks were pressured by our fine members of congress to give loans to subprime borrowers, lest they be deemed “discriminatory” in their lending practices. Real estate agents who have the temerity to suggest to lower income shoppers that they might consider a lower-priced piece of property are labelled as racist, sexist or attempting to reestablish “red-lining.” The marketplace is shackled by special interest groups like the ACLU and legislation that attempts to create equal outcomes for all, rather than ensuring equal opportunity for all. More government isn’t the way to repair the damage that government intrusions into the marketplace create.
Ken,
You are absolutely. America was built on a free market system. Now we are at the mercy of control freaks at every angle. We are paying people to make decisions for us. That is absurd. Every citizen should be able to make individual decisions about his life and livlihood. It is nearly impossible to market a good product today without already having a “name” or working for a corporation that does not want to recognize your work. I can name many people that started from free market ideas including Walt Disney, Sam Walton, Henry Ford, and many others. Unfortunately many of the companies they founded totally corrupted their ideas and ideals.
R/e Don Swanstrom…Is it really productive to repeat that Neo-Con myth that institutions of higher learning are all teeming with Marxist, liberal preofessors looking to indoctrinate our children? One aspect of Libertarianism that I admire is the lack of partisan bickering. However, lately it seems the movement is being co-opted by Neo-Cons who suddenly grew tired of big government when “their” big government was sent packing. To label educational institutions as being under some form of liberal control is simplistic and distracts from the main point of this article. Let’s face it, if a college students views are radically changed by a professor, then those views weren’t very well formed to begin with.
Thanks for a great post. Individually,we must be willing to take a stand, join with others of like mind and work to change the system we now have. We can see that ‘we’ have the ability to make a difference, but only if we stand up. Unfortunately, too often, it is easier, less frightening to say and do nothing.