Tag: Douglas French

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free trade & free markets national politics & policies too much government

The Great Evasion

From the earliest moments of the current, ongoing economic depression, our leaders signaled their fear by hastily concocting programs that postponed the reckoning that had to come.

Douglas French, writing about housing finance today, says a lot simply with his title: “Markets Stagnate Until They Clear.” Government policy has kept mortgages in a weird limbo, and market prices at unnatural highs. Our geniuses in power have even moved heaven and earth to reinflate the old housing boom.

Better to have let it crash and recover rather than keep it unworkably hobbling along.

But the clearing of markets scares politicians silly.

Right after the 2008 implosion, our leaders increased unemployment insurance and offered many new cushions for workers. Humanitarian? Or just another way to avoid new, lower wage rates to match the monetary collapse? I’m not sure about the latter, since the “wages” of not working proved so effective that many workers stayed unemployed voluntarily.

The cost? An extended, lengthy depression.

But that’s not all, of course. By putting more people onto the rolls of the federal government’s dependents list, the burden on taxpayers and on the debt system increases.

Meanwhile, politicians still cannot imagine a way to do what a few other countries, including Canada, have done: cut back on spending and balance budgets.

Our politicians will do anything to avoid that!

Some folks are calling the current period “The Great Recession.” I suggest a better term: “The Great Evasion.” And what’s being evaded is responsibility.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture insider corruption

Billions and Billionaires

Where do billionaires come from?

Douglas French, president of the Ludwig von Mises Institute, reminds us where the term “millionaire” came from. It was

coined in 1720 during John Law’s “Mississippi Bubble” to describe those making vast fortunes in Law’s Mississippi Company stock that rose from 150 livres to 10,000 in the matter of months. But just as quickly, the stock and the currency wildly inflated by Law’s Banque Royale, crashed and Law was forced into exile.

Today’s plethora of billionaires — which in 15 years has increased fivefold — is (argues French) at least in part the result of Ben Bernanke’s monetary manipulations. He’s the John Law of our time. “What were once Law’s millionaires are now Bernanke’s billionaires.… Bernanke has been on the job for six years, and the Gates, Buffetts, and Slims of the world are reaping the benefit. But for how long?”

Keeping track of today’s billionaires has become both a form of popular entertainment (Forbes’s list) as well as a topic for careful study. The political “philanthropy” of George Soros and Charles Koch inspires both enthusiasm and dread in activists, left and right; Warren Buffett has become something of a hero to the 99 percenters, what with his repeated pitches for higher taxes on the rich.

But Buffett is a sly one. He makes his money in a variety of ways — one of which Peter Schiff recently explained: “Buffett actually stated in September 2008 that he would not have invested in Goldman Sachs if not for the implicit guarantee of federal assistance. As a result, he profited at the expense of taxpayers at the very time when they were losing their savings in the markets.”

Not all billionaires are created equal.

This is Common Sense. I’m Paul Jacob.